Wisconsin’s governor manufacturers a fiscal “crisis”, moves to crush unions and then threatens to call out the National Guard.

The brazenness of Wisconsin governor Scott Walker is truly breathtaking. I suppose I have been so naïve that it seemed to me that people like this really don’t exist. No one can be this… Cruel? Cynical? Devious? All while in plain sight, in the garb of “respectability” that is normally afforded a sitting governor.

So, here’s the short version, for those of you who haven’t been following this, from HuffPo.

Enter Scott Walker. Newly-elected GOP governor of Wisconsin with GOP control of both houses, it is understandable that he didn't think he had to ask for permission. But this was way, way over the top, both in terms of procedure and substance.

In terms of procedure, it does not play well to announce a radical bill that will devastate long-standing promises of economic security and then allow only three days for debate before the final vote on ratification. Asked why he did not give the unions even an opportunity to negotiate, Walker's answer joins the litany of the greats along with Richard Daley, Sr., and Huey Long: "To those who say why didn't I negotiate on this? I don't have anything to negotiate with. We don't have anything to give. Like practically every other state in the country, we're broke. And it's time to pay up."

That position was slightly undercut by his insistence that the only alternative would be to lay off 6,000 state workers. It does not quite do to insist that there is nothing about which to negotiate and then to identify a point of negotiation in the very next sentence. All of that, of course, was right before he said that the National Guard is standing by to intervene if public employees try to strike.

In terms of substance, it is hard to know where to begin. Walker's "Repair the Budget" bill is primarily a union-busting measure, many of whose provisions have no fiscal consequences at all. The bill requires public employees to make contributions to pensions and the costs of health care, but union representatives insist that they have no objections to those provisions. They insist that what they care about is the curtailing of collective bargaining rights. But maybe they should read the bill again. Here's a particularly juicy bit:

"Wages would include only total base wages and would exclude any other compensation, including, but not limited to, overtime, premium pay, merit pay, performance pay, supplemental compensation, pay schedules, and automatic pay progressions [emphasis mine]."

In other words, the entire salary grid for teachers would be thrown out, and school districts would be free to define and implement new salary systems from scratch. That's in addition to giving the administration unprecedented authority to redefine Medicaid eligibility (but only downward), and enough other material to fill 144 pages.

OK, I guess that sets the picture. The governor decides that, because of this “fiscal emergency” where the state is absolutely broke, he will gut any and all unions. Sure, that follows. But, if that wasn’t bad enough, guess what? Walker pretty much manufactured the entire “crisis” himself in his first few days in office by giving tax cuts and other gifts to the people and organizations that helped him get elected. Via TPM.

Wisconsin's new Republican governor has framed his assault on public worker's collective bargaining rights as a needed measure of fiscal austerity during tough times.

The reality is radically different. Unlike true austerity measures -- service rollbacks, furloughs, and other temporary measures that cause pain but save money -- rolling back worker's bargaining rights by itself saves almost nothing on its own. But Walker's doing it anyhow, to knock down a barrier and allow him to cut state employee benefits immediately.

Furthermore, this broadside comes less than a month after the state's fiscal bureau -- the Wisconsin equivalent of the Congressional Budget Office -- concluded that Wisconsin isn't even in need of austerity measures, and could conclude the fiscal year with a surplus. In fact, they say that the current budget shortfall is a direct result of tax cut policies Walker enacted in his first days in office.

"Walker was not forced into a budget repair bill by circumstances beyond he control," says Jack Norman, research director at the Institute for Wisconsin Future -- a public interest think tank. "He wanted a budget repair bill and forced it by pushing through tax cuts... so he could rush through these other changes."

Got that? The state could have possibly ended up with a surplus this fiscal year if it WEREN’T FOR THE DIRECT ACTIONS OF THE GOVERNOR HIMSELF!!

And that’s the reason why unions need to be broken up, and the National Guard called out to deal with any striking workers.

I would like to know what all those Tea Partiers who voted for this criminal were thinking. How much worse do they think a Democrat would be in that office? This guy is gutting the future of most of the middle class who are unfortunate enough to work for the state. “Get the government off the throat of the people! And let’s bust all unions and take away all collective bargaining rights at the same time, O.K.?”

AAARRRGGGHHHHH!!!!

I just truly do not understand how middle and lower class people can vote for Republicans.

Republicans all across the country seem to have declared war on the middle class. Everything that they are doing appears to be for the benefit of the wealthy and big business, at the expense of working class Americans.

Here’s the latest example from Wisconsin, via Washington Monthly.

Citing Wisconsin's gaping budget shortfall for this year and even larger ones expected in the years ahead, Gov. Scott Walker proposed a sweeping plan on Friday to cut benefits for public employees in the state and to take away most of their unions' ability to bargain.

The proposal by Mr. Walker, a Republican who was elected in November after pledging that he would get public workers' compensation "into line" with everyone else's, is expected to receive support next week in the State Legislature, where Republicans also won control of both chambers in the fall.

The prospect left union leaders, state and local employees and some Democrats stunned over the plan's scope and what it might signal for public-sector unions in the state.

On Thursday, the newly-elected Republican governor said he would refuse to negotiate with unions, and on Friday, Walker said he's contacted the Wisconsin National Guard, making sure they're prepared to respond to a protracted labor dispute, doing some of the jobs union members currently do.

Even by GOP standards, the scope of Walker's union-busting efforts is striking. We're talking about a governor effectively stripping nearly all government workers of their collective bargaining rights, and then trying to break the backs of unions themselves.

Mr. Walker made several proposals that will weaken not just unions' ability to bargain contracts, but also their finances and political clout.

His proposal would make it harder for unions to collect dues because the state would stop collecting the money from employee paychecks.

He would further weaken union treasuries by giving members of public-sector unions the right not to pay dues. In an unusual move, he would require secret-ballot votes each year at every public-sector union to determine whether a majority of workers still want to be unionized.

And in case that wasn't quite enough, Walker then added that union members would no longer be allowed to negotiate for better pensions or health benefits at all.

The governor is working with a newly-elected Republican-led legislature, and he's expecting lawmakers to pass his anti-union plan quickly.

And here’s the latest of what is going down in Florida.

Florida's Tea Party-backed Governor Rick Scott proposed cutting more than $5 billion from state spending on Monday while also slashing taxes as he laid out his first budget proposal aimed at closing a deficit of nearly $4 billion.

The Republican, a former healthcare executive, proposed saving nearly $4 billion over two years by reforming Medicaid, the health insurance program for poor people.

He also saw savings of $2.8 billion over two years through an overhaul of Florida's relatively healthy state pension system. Scott also proposed cutting taxes by more than $4 billion over two years. This would include a roll-back of corporate income taxes from 5 percent to 3.5 percent and reductions in property taxes.

Critics of the budget plan from Scott, who was elected in November on a pledge to create 700,000 jobs in seven years, said it would cut nearly 9,000 positions from state payrolls and slash billions of dollars from spending on education.

"This budget from the governor is a frontal assault on the quality of life of every Floridian and will not create a single job nor spur our economy forward; instead it takes us further into the economic ditch," Florida Democratic Party Chairman Rod Smith said in a statement.

And, of course, no discussion of this type would be complete without talking about New Jersey’s Chris Christie and his apparent hatred of school teachers.

And, lest us not forget that apparently every single Republican in the country wants to scale back or get rid of Social Security altogether.

Yeah, I know that everyone is hurting everywhere, and all states are experiencing some major budget crises. But why are all the “remedies” always aimed directly at the working class? Why do we NEVER hear about making big business and the upper crust of this country bear some of the burden? This IS the country that allowed them all to amass all those riches, after all. What is wrong with spreading the pain around, especially to those people who can actually deal with the pain?

If it comes down to a choice between middle and lower class people being able to afford housing, food and a relatively stable future for themselves and their children, and a bunch of rich people not being able to afford luxury homes, or a second home in the Hamptons, or a yacht, I know what I would choose.

What is wrong with these people? And why do lower and middle class voters KEEP VOTING FOR THESE A**HOLES?

I just do not understand…

Boy, I hate Christmas commercials on television.

When I was a kid, Christmas commercials used to be kind of cute or silly.... "Noelco! Even our name says Merry Christmas!" I am old enough that I still remember the stop animation Santa riding down the hill on a three headed shaver. But it seems that a vast majority of the commercials we see today are for two, very high-priced items: jewelry and automobiles. The ones for jewelry, I am sorry to admit, really kind of make me want to hurl. Ultra-romantic, everything just perfect. Oh, how your lady's eyes will glow with love and complete adoration when you give her this expensive bauble. Who in their right mind would go out into the woods or even in their own yard and put up literally thousands of Christmas lights just so they can give their wife/girlfriend a necklace? Cripes. Maybe I am just a total unromantic, but these things are so stupid in their overwhelming desire to make the watcher try to emulate the "Perfect Christmas Gift." Ugh.

And the ones for cars... It's now apparently expected that people will go out and buy expensive cars at Christmas. One commercial even had a wife surprising her hubby with a brand new car, and she somehow contrived to have the damn thing inside in the living room with all the Christmas decorations.

At a time when 10% of Americans are out of work and a larger percentage have either given up looking or are what we euphemistically referred to as "under-employed", it doesn't seem terribly appropriate to be rubbing the fact that there are still some people (the ones who want Bush tax cuts for the top 2%) who can buy this really unnecessary but terribly expensive crap.

Yeah, I know that I write a variation of this post every single Christmas... But that doesn't lessen my feelings any.

Bah-humbug.

Image from The Golem Universe.

So Rand Paul thinks that accidents just happen all by themselves?

Here is a recent quote from Mr. Paul on the ongoing BP-caused ecological disaster.

What I don’t like from the president’s administration is this sort of, ‘I’ll put my boot heel on the throat of BP,’ ” Mr. Paul said, referring to a remark by Interior Secretary Ken Salazar about the oil company. “I think that sounds really un-American in his criticism of business. I’ve heard nothing from BP about not paying for the spill. And I think it’s part of this sort of blame-game society in the sense that it’s always got to be someone’s fault instead of the fact that sometimes accidents happen.”

I cannot begin to explain how many misguided notions and outright lunacy those few sentences contain. And to think that this is from who will probably be a U.S. senator by the end of the year is absolutely frightening.

But let’s talk about that bit about accidents “happening.” Paul’s quote makes it sound as if accidents don’t have a cause. They sometimes just appear for no reason and are totally unexpected. This is absolutely incorrect, and this is a very ridiculous thing to say about very complex, man-made technology. This happens to be an area that I know something about.

Since the beginning of the 20th Century, there has been a study of industrial accidents -- why they occur and what can be done to prevent them. If you put in the correct search words, you can find all sorts of books on Amazon that talks about accidents and their causes. This is a very specialized field of study done by a number of very dedicated and intelligent people. Accidents do not just “happen.” There are causes, usually multiple ones, for every serious industrial accident. The response of our society has been to mandate certain safeguards and minimum acceptable safety standards by the Code of Federal Regulations. Every important and potentially hazardous industry in this country is regulated in this manner – aviation, railroads, finance, drugs, mining, nuclear power… The list goes on and on. We do this for the common good of the American people.

When things start going wrong is when companies start taking shortcuts or bypassing these regulations. This is not to say that these regulations are perfect and, if followed, would prevent every accident. That is not true. But it would be much less likely that a catastrophic accident occurs if the appropriate regulations are followed. And, of course, there is always the inevitable pushback from the industry and their lobbyists. Money and political pressure can do wonders to weaken and even remove protective legalization. Alternatively, companies can just ignore the rules and fight tooth and nail when challenged. This appears to be what Massey Energy was doing when a coal mine they owned in West Virginia, the Upper Big Branch Mine, experienced an explosion that killed twenty nine workers. From Wiki:

In 2009, the company, Massey Energy, was fined a total of $382,000 for "serious" unrepentant violations for lacking ventilation and proper equipment plans as well as failing to utilize its safety plan properly.[18] In the previous month, the authorities cited the mine for 57 safety infractions.[19] The mine received two citations the day before the explosion and in the last five years has been cited for 1,342 safety violations. The CEO of Massey Energy, Don Blankenship, has received criticism for his apparent disregard of safety.[20]

Accidents do not “just happen.” There are causes. They might be from heretofore unknown or truly unexpected causes, but there are causes. In the case of the catastrophic explosion about the Deep Horizon oil drilling rig and subsequent oil release from the bottom of the sea floor, it appears that many regulations were not complied with and many warning signs were ignored. Yet, BP and Transocean pressed ahead. The most important considerations were schedule and cost.

There is a concept called “magical thinking.” I even wrote a post about it myself a while back. But this concept seems to have taken firm root in the boardrooms American corporations and the front line management of American industry. The thinking seems to go, “We don’t need to follow these regulations. They are not doing any good and just costs us money to follow them. Nothing bad is going to happen. Trust us.” That’s what it can be boiled down to. “Trust us. Nothing bad is going to happen.”

This is the thinking that has given us the worst ecological disaster in American history, which no one knows how to fix. Even if these geniuses figure out how to stop the huge flow of oil into the Gulf of Mexico today, we will still be faced with decades of the effects of the oil that is already there. This thinking gave us the worst financial meltdown this country has seen since the Great Depression. This thinking gave us twenty nine dead miners in West Virginia.

Accidents occur for reasons, and regulations have been put in place to reduce the likelihood of something going terribly wrong because of the reasons that we know about. Willfully ignoring these regulations in the chase for ever-expanding profits for people who are already rich is obscene.

The corporations in this country, along with the government agencies that are tasked with oversight, need a drastic change of focus and purpose. Regulations are not evil. Accidents do not “just happen.” Unfortunately, I believe that this country is too far gone. Huge corporations are too voracious, too powerful, too willing to do whatever it takes to retain and expand their profits. Following rules are for little people.

Peak oil may only be a few years away, according to the U.S. Army..

There was discussion of this subject a few years ago, when gasoline was running around $4.50 a gallon. However, since then, things seem to have eased up and bit and there were more important subjects to talk about, like death panels and whether or not Barack Obama is really an American.

But it appears that the concern regarding the world’s oil supply is back, in a big way. When the U.S. Army starts warning about something (other than potential military targets, I mean), we should probably start paying attention.

From Susie Mandrak at Crooks and Liars:

The US military has warned that surplus oil production capacity could disappear within two years and there could be serious shortages by 2015 with a significant economic and political impact.

The energy crisis outlined in a Joint Operating Environment report from the US Joint Forces Command, comes as the price of petrol in Britain reaches record levels and the cost of crude is predicted to soon top $100 a barrel.

"By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day," says the report, which has a foreword by a senior commander, General James N Mattis.

It adds: "While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds. Such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and perhaps have serious economic impact on both China and India."

The US military says its views cannot be taken as US government policy but admits they are meant to provide the Joint Forces with "an intellectual foundation upon which we will construct the concept to guide out future force developments."

The warning is the latest in a series from around the world that has turned peak oil – the moment when demand exceeds supply – from a distant threat to a more immediate risk.

[...] Future fuel supplies are of acute importance to the US army because it is believed to be the biggest single user of petrol in the world. BP chief executive, Tony Hayward, said recently that there was little chance of crude from the carbon-heavy Canadian tar sands being banned in America because the US military like to have local supplies rather than rely on the politically unstable Middle East.

But there are signs that the US Department of Energy might also be changing its stance on peak oil. In a recent interview with French newspaper, Le Monde, Glen Sweetnam, main oil adviser to the Obama administration, admitted that "a chance exists that we may experience a decline" of world liquid fuels production between 2011 and 2015 if the investment was not forthcoming.

I was hoping, in a very selfish way, that our current situation regarding energy would stay pretty much status quo for the next 10 to 15 years. I would have been long retired. I would not be commuting to work anymore and I wouldn’t have to be concerned about my job, given that it depends rather heavily on the availability of oil. Very selfish of me, I know, but I am not sure what else I could do on a personal level. Our society is based on the premise that no problem is too large to ignore completely until it becomes a huge crisis. That is what is going on with our dependence on oil, foreign and otherwise. Given how much of the stuff that the world’s countries use on a daily basis, it is a foregone conclusion that it was going to run out sooner than later. But this report from the Army is pretty frightening. Two years and all surplus capacity will disappear? I happen to remember the OPEC oil embargo of the 70’s, and it wasn’t pretty. This would make that look like a picnic.

It is unfortunate fact, but I think many of the conservatives and proponents of “drill, baby, drill” are correct. It is going to be much easier to keep trying to tap into more pockets of oil to keep our society, as we know it, going. It is much more difficult to come up with completely new and large scale energy sources. That’s the problem, you know. It isn’t so much that we don’t have the knowledge to do solar power, wind power and hydrothermal power. We just aren’t going to be able to do it on a large enough scale to actually matter before the crisis point hits.

That’s pretty scary.

Here’s a good question for those who wish for a smaller, almost non-existent government in the United States.

I saw this question posed somewhere on the toobes at some point this week. I wish I had saved the address. I think this is a very good point.

To all those ultra-conservatives who believe that the federal government in the U.S. should be really tiny (e.g., Grover “drown it in the bathtub” Norquist), what exactly do you think would happen next? What form of society do you really want to have?

Do you, for instance, think that there would all of a sudden be a Garden of Eden where all us lovely individuals with lots and lots of freedoms from government would just get along swimmingly? Would all multi-national corporations suddenly behave themselves and have their customers’ satisfaction, money and safety in mind as their first priority? There wouldn’t be any big businesses that would, say, dump tons and tons of pollutants into rivers and lakes so that the entire region would be so polluted that human life might be endangered? Would, perhaps, financial institutions really care about their customers such that their financial interests were protected? Would insurance companies really insure everyone who needed insurance, or would they cherry pick those who didn’t need it? Would airlines, for instance, set up their own air traffic control system so that airplanes wouldn’t run into each other in the air or on the ground? Would electrical power companies build nuclear power plants that were really, really safe, so that an accidental release of radiation could never happen?

What do these people expect would happen if government really stopped paying attention to anything but going to fight wars overseas? Is this really what those people want? These huge corporations have proven, time and time again, that they only thing they care about is making massive amounts of money, and they don’t really care if they being unethical, unsafe or downright evil to do it. All they care is making tons of money, as fast as they can.

Is this really what the proponents of itty-bitty government really want to unleash on our society; a total abdication of oversight of huge corporations that affect our daily lives much more than does the federal government? That is what they want? You think that the rich and powerful would just sit back and “do the right thing” just because there was no federal government to check whether or not they were following the regulations?

That is a rhetorical question, of course. No, these cutthroats would not sit idly by. They would find every single method of being the “big dog” in the country, and if it means that normal people must exist in poverty, in hunger, in the cold and dark, for them to do it, well, that’s capitalism, the best economic system in the world!

Boeing continues its exodus from Seattle.

Boeing has just made the decision to set up a second 787 production line in South Carolina. Actually, “just” is not an appropriate use of the word here, because many believe that Boeing management made the decision quite some time ago and was just playing the leverage game with SC to get more favorable terms. They played the same game as many owners of professional sports teams do. They set up a conflict between the current home and some other location that is just lusting after whatever it is. The owners then use the conflict to pull a power play and use their toy as a bargaining chip to see who is going to give them the most favorable terms. Sometimes they stay (like the Seattle Seahawks that almost moved to L.A. and the Seattle Mariners that almost moved to Tampa) and sometimes they go (such as the Seattle Supersonics, that did move to Oklahoma City). Who is going to give the rich owners even more goodies?

But, for Boeing, the die was cast long ago; Boeing was going to South Carolina. Boeing management had had its fill of strikes by the Machinists Union. (SPEEA, the engineering union, went on strike over 10 years ago and it had a significant impact, but by making membership in the union mandatory for all engineers, that union has effectively been neutered. It will not strike again.) It didn’t matter if there were valid grievances or not. They didn’t like the strikes. This follows their move of corporate headquarters to Chicago a number of years ago. Boeing is, without any doubt, no longer one of the fixtures of the Pacific Northwest.

I have absolutely no doubt that whenever Boeing decides to build their next airplane, such as a replacement for the long-in-the-tooth 737, it will also go to South Carolina. Boeing can make a ton of money by selling the land that the 737 plant current sits on, and they can go somewhere where the infrastructure will already exist, complete with a non-unionized work force.

I’m not going to try to do an analysis here. It’s just one more example of huge corporations existing for themselves and their shareholders. They do not exist for the benefit of their workers or their communities. Those things are seen, more often than not, as the enemy. I don’t know why this should be. Why are people who buy stocks in a company more important than the people who put a huge chunk of their lives into it? To me, that’s an astounding business model and one large proof that, in today’s America, the almighty dollar is the only thing that matters.

I could write some major paragraphs about the 787 program itself, which has been an unmitigated disaster for Boeing. It is over two years late and the first airplane still has yet to fly. It is not a coincidence that this is the first major airplane program undertaken by the company after its supposed “merger” with McDonnell Douglas, in which McDonnell Douglas essentially bought Boeing with Boeing’s own money, and, with the exception of Alan Mulally, who is now departed and the CEO of Ford, put in ex-McDonnell Douglas people into upper management. The program has been mishandled from the beginning, and it is because of how Boeing is now run. But yet, moving to South Carolina is seen as being “in the best interests of the company.” The workers who will lose their jobs were not the cause of this fiasco, yet they are the ones that will suffer.

Seattle will survive this blow, and the blow that will come in the future when the 737 replacement is also built somewhere else. The Pacific Northwest is a pretty vibrant area in a lot of different ways. We still have Microsoft, Amazon, Starbucks and some other high-tech businesses. But continued losses such as Washington Mutual (see my earlier post on that subject), major parts of Boeing and the Seattle Supersonics does feel like we are absorbing some major punches in the gut. We are slowly losing what has earlier defined Seattle. Things come, things go, but the quest for the almighty dollar remains.

(Disclaimer: I worked at Boeing for 19 years, before moving on about 9 years ago. I still work in commercial aerospace. Nothing I have said in this post came from any sort of inside knowledge. Everything is readily available from public sources, such as newspapers and the internet.)

Republicans are patting themselves on the back for not voting for the stimulus bill.

The modern Republican party is truly beyond me. I cannot truly believe that so many people elected to public office can be so small minded and self centered. Yes, sure, I know there are going to be many, many areas where Republicans and Democrats disagree with each other. But there really has to be a time when they stop playing games and work to find common areas where both parties can come together and help this county. And this would seem to be one of those times. See this post on the finanacial crisis.

But no. Republicans are bound and deteremined to be “the opposition party” both in name and spirit. Anything the Democrats want to do is either bad, so they must oppose it, or else it might actually be good and if it works, that would be good for the Democrats, and they must oppose it as well. They have pretty much admitted that is their mindset these days. The last two elections have taught them absolutely nothing.

I must give President Obama a lot of credit for trying to get bipartisan support for this stimulus bill. There are many good reasons what that, in principle, would be a good thing to do. But the Republicans, after they initially made some hopeful signals, reverted to their true form. Zero votes from the House Republicans, three votes from Senate Republicans. And they are congratulating themselves on this! Michael Steele, the new leader of the Republican party, said “The big fat goose egg you laid on the president’s desk was just beautiful!” They are congratulating themselves for this, and are going around making statements like, “I hope the White House learned their lesson!”

You know what? I think that the White House may have indeed learned their lesson. However, it’s not the one that the Republicans may have desired. I found this quote from a post at Washington Monthly.

Advisers concluded that they allowed the measure of bipartisanship to be defined as winning Republican votes rather than bringing civility to the debate, distracting attention from what have otherwise been major legislative victories. Although Mr. Obama vowed to keep reaching out to Republicans, advisers now believe the environment will probably not change in coming months.

Rather than forging broad consensus with Republicans, the Obama advisers said they would have to narrow their ambitions and look for discrete areas where they might build temporary coalitions based on regional interests rather than party, as on energy legislation. They said they would also turn to Republican governors for support -- a tactic that showed promise during the debate over the economic package -- even if they found few Republican allies in Washington.

So, what it looks like to me has happened is that the Republicans shot themselves in the foot on this one. And it took them all of three weeks as the minority party! They are proud of trying to scuttle a measure that around 65 percent of the country wants! They have cut themselves out of future deliberations on controversial issues. The working assumption by President Obama might now be that Republicans are going to obstruct anything that he wants to accomplish, so might as well go around them. Truthfully, this is the advice that many progessive bloggers and columnists have been giving Obama since Day One. But it looks like he may have learned his lesson the hard way.

The Republicans may have also learned a hard lesson. However, I am thinking that the current crop of Republicans, except for a tiny minority, has such rock hard heads that absolutely nothing is going to soak in. Such will be the next four years, and most likely, eight. They appear, to me, to be working tirelessly to make themselves irrelevant. But, as long as they can feel all righteous and indignant while doing so, I guess that's all they want.

According to someone who looks like he should know, we were about four hours away from losing our entire economic system here in the U.S.

I really hate the phrase “the end of **** as we know it”, and the person speaking is being perfectly honest. That phrase is fine when I hear it in a 1950’s era sci-fi film, like Them! For things in the here-and-now reality, no, I don’t like to hear that. It really gave me the heebie-jeebies, whatever those are, when I first heard a clip of this on Countdown. Here is a text version that I came across below was in a much bigger column in Sadly, No! (You should go read this post at SN. It’s hysterical and deeply, deeply depressing at the same time.)

Via C-Span, Rep. Paul Kanjorski (D-PA), chairman of the House Capital Markets Subcommittee:

“I was there when the secretary and the chairman of the Federal Reserve came those days and talked to members of Congress about what was going on… Here’s the facts. We don’t even talk about these things.

“On Thursday [September 18], at about 11 o’clock in the morning, the Federal Reserve noticed a tremendous drawdown of money market accounts in the United States to a tune of $550 billion being drawn out in a matter of an hour or two. The Treasury opened its window to help. They pumped a hundred and five billion dollars into the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks. They decided to close the operation, close down the money accounts, and announce a guarantee of $250,000 per account so there wouldn’t be further panic and there. And that’s what actually happened. If they had not done that their estimation was that by two o’clock that afternoon, five-and-a-half trillion dollars would have been drawn out of the money market system of the United States, would have collapsed the entire economy of the United States, and within 24 hours the world economy would have collapsed.”

“It would have been the end of our political system and our economic systems as we know it.”

O.K., I would normally dismiss people who go around saying things like, “It would have been the end of our political system and our economic systems as we know it”, as someone just going all over-the-top and hyperbolic in order to inflame whoever it is he is trying to inflame. Rush Limbaugh comes to mind. Or maybe he might be just an insane gasbag, such as James Inhofe (R-OK). In this case, however, I am pretty much inclined to believe what this guy is saying.

If this statement above is anywhere near the truth, then I have a severe case of sweaty palms. We are actually talking about how close we came to “the end of our political system as we know it.” That is a very scary thing to contemplate. Oh sure, there are quite a few Republicans that we could certainly do without, and I am certainly weary of the constant political games being played as if politics were some sort of game of Cricket in coats and ties. But about the only thing that could end our political system at this time is complete anarchy, which a complete collapse of our financial system could certainly precipitate. Anarchy is not a pretty thing to contemplate.

Painting of French Revolution from here.

Could the future transportation needs of the U.S. be met with trains?

I just finished reading a really informative feature story on the Washington Monthly blog. It covers a lot of ground, but it is mostly advocating a radical increase in spending on railroad infrastructure. Transporting freight by rail is much more efficient than by a fleet of trucks. It has the additional benefit of being also much safer, as it takes a significant amount of truck traffic off our already congested and sometimes unsafe highway system.

The significant downside of increasing the use of rail traffic for our transportation needs is that the current system is pretty maxed out right now, and railroad infrastructure is very costly.

However, when all aspects are considered, it would appear that the United States ought to at least consider a large-scale jump in our railroad capacity. Expecting the railroads themselves to fund this expansion is not terribly realistic, although many are already laying new tracks with their own funds.

The feature in the Washington Monthly discussed one very interesting point that I had not really considered before. That is, what would power this next generation rail system? Diesel locomotives, although they are getting better all the time, are still based on internal combustion engines that consume petroleum products and emit pollutants. Because all industries should be considering how to “go green” in the 21st century where energy is going to become more and more precious, the railroad industry should stop and think a bit about this. The proposal laid out is to use wind power, especially in the central plain states, to power electric locomotives. Windfarms could be built alongside the tracks, which would have a couple of positive benefits. First, the transmission lines would not need to be very long. Electrical grids lose quite a lot power just by energizing the system. These losses can be rather substantial if the grid is not well maintained. The other benefit is that the trains themselves could just bring all the materials for windfarms and dump them by the side of the tracks. Modern windmills are very high-tech and rather massive. By having the windfarms set up shop in very close vicinity to railroad tracks, transporting the windmill components becomes less challenging than by trucking in large components to out-of-the-way locations.

Electric locomotives are not widely used in the U.S., except for the Northeast corridor (Boston, New York, D.C.) and other metro areas. However, at one time, electrified rail lines, such as the one shown in the picture above, were commonplace. They are able to generate a significantly larger percentage of pulling power over diesel-powered locomotives, since diesels must carry large reciprocating engines, electrical power generators and diesel fuel. Electrically powered locomotives pull power directly from the grid above and send it directly to the electric motors that drive the wheels. They also have one other added benefit. Train locomotives use a braking technique to slow down called dynamic braking. The electric motors that usually drive the wheels are used instead as brakes, which generate electric power. In diesel locomotives, this generated electricity just goes into big radiators and is lost as heat. With an electrified rail line, however, this electrical power can be put back into the electrical lines above for use by another train.

Here in Washington state, electric locomotives made quite a bit of sense. Both the Great Northern Railroad and The Milwaukee Road made heavy use of electric locomotives in the early and mid-20th Century. Hydroelectric power was cheap and plentiful. There was also the presence of an imposing tunnel through the Cascade Mountains at Stevens Pass. The Great Northern Railroad suffered a potentially catastrophic accident when one of its trains powered by a coal burning steam locomotive got caught in the tunnel. The crew and all the passengers could have easily asphyxiated. Luckily, the train was able to back out of the tunnel. This event caused Great Northern management to reconsider this approach. The Great Northern ended up installing an electrified rail line from Skykomish, on the western slopes of the Cascades, to Wenatchee, near the Columbia River in eastern Washington. The dam built by the Great Northern across the Wenatchee River up from Leavenworth, Washington, that was used to house the electrical generators that powered this section of GN track still remains today.

Electrically driven railroad locomotives are not some vast leap in technology. It is technology that was in use from the 1930’s, and is still in use to today. The building of such a transportation infrastructure would be costly, but it would generate a not insignificant number of new jobs and well as address the country’s growing transportation needs. I would hope that there are some forward looking people in this country would might consider this proposal as something more than just a pipedream. Given the looming shortages in fossil fuels and the need to develop more “green” industries, the U.S. could do a lot worse than spend some resources in this area.

(The picture above is of the Milwaukee Road electrified rail line through the town of Renton, Washington. The picture is from 1971, and comes from the website, rrpicturearchives.net. This is from the collection of Martin Burwash. I hope that he won’t mind me using the picture, as I am providing a link. For train enthusiasts, this is a very cool web site and includes a great deal of historical railroad photos.)

Wal Mart employee trampled to death during Christmas rush. I see the poor economy hasn’t reduced shopper’s insanity.

I am serious. There really isn’t any word other than “insane” to describe this.

NEW YORK - Police were reviewing video from surveillance cameras in an attempt to identify who trampled to death a Wal-Mart worker after a crowd of post-Thanksgiving shoppers burst through the doors at a suburban store and knocked him down.

Criminal charges were possible, but identifying individual shoppers in Friday's video may prove difficult, said Detective Lt. Michael Fleming, a Nassau County police spokesman.

Other workers were trampled as they tried to rescue the man, and customers stepped over him and became irate when officials said the store was closing because of the death, police and witnesses said.

Police said about 2,000 people were gathered outside the Wal-Mart doors before its 5 a.m. opening at a mall about 20 miles east of Manhattan. The impatient crowd knocked the employee, identified by police as Jdimytai Damour, to the ground as he opened the doors, leaving a metal portion of the frame crumpled like an accordion.

"This crowd was out of control," Fleming said. He described the scene as "utter chaos," and said the store didn't have enough security.

Dozens of store employees trying to fight their way out to help Damour were also getting trampled by the crowd, Fleming said. Shoppers stepped over the man on the ground and streamed into the store.

Damour, 34, of Queens, was taken to a hospital, where he was pronounced dead around 6 a.m., police said. The exact cause of death has not been determined.'

A 28-year-old pregnant woman was taken to a hospital, where she and the baby were reported to be OK, said police Sgt. Anthony Repalone.

Kimberly Cribbs, who witnessed the stampede, said shoppers were acting like "savages."

"When they were saying they had to leave, that an employee got killed, people were yelling `I've been on line since yesterday morning,'" she said. "They kept shopping."

I read about these kinds of events every year. It happens with depressing regularity. And what’s really strange and unnerving about this is that you realize that a large majority of those early Christmas shoppers every year are women. These are women doing this, who I would like to imagine have a bit more humanity and compassion to them than men. That is a bit of a reverse-sexist opinion on my part, but that has how I have always thought of it. I find it very unnerving that rational thinking processes can be halted and raw emotion substituted by nothing more than a early Christmas sale at a place where you can buy all sorts of junk already at a very low price (which is the subject of a different post altogether).

The mob mentality is a really funny thing. You see it at political rallies and old Universal horror films where the townsfolk are whipped up into a frenzy and storm the castle with pitchforks and torches. But shopping? This is especially indefensible when you stop to think that the same items are going to be available for the next month. Yes, you might save a few bucks, but is that really worth all this? What I find even worse is that the shoppers became very angry and some refused to leave when they were asked to leave because of the death of the employee. That's doubly insane. Just think about that. This poor man isn't going home anymore. He went to work in what you would think is a very safe environment, and he ends up dead. I doubt his family understands. I certainly wouldn't.

I guess I am of the opinion that an event like this is really a peek inside the psyche of our society. It isn’t just a one-off “damn, who would have ever thought that?” kind of event. It is a demonstration of our base, primitive nature. If our society devolves, at some time in the future, to the point that food and water are scarce commodities, I will be very scared. Add angry men with abundant attitudes and guns to the mix and the situation described above, and it won’t be pretty.

Don’t the Christmas commercials seem particularly forced this year?

Several I have seen really are almost manic in the desire to impart that Christmas (read “shopping”) spirit. All you have to do is look at the retailers themselves and look at all the stores that are closing or corporations going out of business completely to see that things aren’t really that normal this year. Here is a list of some retailers whose Christmas (read “shopping”) season won’t save them.

- Circuit City stores... TBD

- Ann Taylor - 117 stores nationwide are to be shuttered

- Lane Bryant

- Fashion Bug

- Catherine's to close 150 store nationwide

- Eddie Bauer to close stores 27 stores and more after January

- Cache will close all stores

- Talbots closing down all stores

- J. Jill closing all stores

- GAP closing 85 stores

- Footlocker closing 140 stores more to close after January

- Wickes Furniture closing down

- Levitz closing down remaining stores

- Bombay closing remaining stores

- Zales closing down 82 stores and 105 after January

- Whitehall closing all stores

- Piercing Pagoda closing all stores

- Disney closing 98 stores and will close more after January.

- Home Depot closing 15 stores 1 in NJ (New Brunswick)

- Macys to close 9 stores after January

- Linens and Things closing all stores

- Movie Galley Closing all stores

- Pacific Sunware closing stores

- Pep Boys Closing 33 stores

- Sprint/ Nextel closing 133 stores

- JC Penney closing a number of stores after January

- Ethan Allen closing down 12 stores.

- Wilson Leather closing down all stores

- Sharper Image closing down all stores

- K B Toys closing 356 stores

- Lowes to close down some stores

- Dillard's to close some stores.

I guess the "Magic Kingdom" isn't totally insulated from reality... And those are only the retailers. This is hitting all aspects of the economy. Boeing recently announced they may be looking at layoffs next year, even though they have a huge backlog in the commercial airplane orders. DHL is closing down its U.S. operations. Washington Mutual, or what is left of what used to be WaMu, announced massive layoffs here in Washington state.

It’s really difficult to get that Christmas spirit (read “opening up your wallet and spending your hard earned cash) given this environment. If you are one of the unfortunate many that have lost or may lose your job in the near future, I wish you luck and I hope that you land on your feet soon. But I have seen some recent predictions that unemployment in the U.S. may hit 10%. That’s a number not seen since the 1930’s. And even if you aren’t in danger of being unemployed, you might not be too willing to be a huge spender and run up a large bill on your credit cards this year, like so many people used to do in the past, given that your 401K is worth about 50% less than it used to be.

This is looking like a very large downward spiral, with negative feedback that continually reinforces itself. I guess I never really realized how interdependent everything is on a large amount of people going out and buying stuff, much of it they may or may not need. It’s a consumer society indeed. It’s all a very elaborate house of cards that was wobbly to begin with. The fact that a large number of fat cats in the banking and house loan “industry” wanted to soak the consumers and make as large amount of money as they could, and the fact that they had willing marks on the consuming end who wanted stuff (like houses they couldn’t afford and SUV’s they had to refinance their existing house loans to buy) for pulling out those few cards on the corner that started this whole thing on its way to collapse.

Let’s hope that this plays itself out soon and there’s something left to salvage.

The economic crisis keeps gathering steam.

As I have said many times before, I have no training, or even understanding past the basics, of our economic system. But I do read a number of people who do. Paul Krugman of the NY Times just won a Nobel Prize for his work in economics, and he continues to be very concerned that the governments of the world are not adequately addressing this now global crisis. If he is worried, then I am worried.

The United States tried to do something several weeks ago with the $700 billion bailout package that was rushed through Congress. Oh, you certainly can’t fault anyone for not being enthusiastic enough in the response. There were a few words of caution put forward by politicians of both sides concerning this bailout package. Why this particular amount of money? Who was it to go to? What was the money to be used for, exactly? What kind of oversight was going to be provided? But the predictions were so dire that politicians gulped several times, crossed their fingers that they were doing the right thing, and pulled the trigger. The consequences of this action, both the good and the bad, are yet to be determined. All that seems apparent is that, even though $700 billion is a very large amount of money, it isn't going to be nearly enough.

What bothers me about this is not the fact that the government of the United States is rather embracing socialism, without ever saying so. Our society is based on many of institutions of this country, and it appeared to me that several of them were about to get their legs kicked out from under them by the fact that credit was drying up, quickly, on a global basis. Credit, whether we like it or not, is the grease that makes our economy grow. (It’s not really a coincidence that George Bush asked everyone to “go shopping” in response to the events of 9/11 and our subsequent invasion of Iraq.) No, I believe that we needed to do something. And something we did.

What is really under my skin is the continuing reports about how many people out there seem to think that this sudden influx of money, lots of money, is somehow a declaration of an open season for “getting as much as you can”, whether you deserve it or not. Reports of AIG executives having “retreats” at very posh vacation spots keep trickling out. Maybe, just maybe, one of these might be expected out of fat cats who think that “avarice” is synonymous with “good business practices”. But after they got toasted in front of a Congressional hearing, you would have thought that would have been an example to both AIG and the rest of the industry. No, reports, including those about more AIG executive outings, continue to leak out. The bailout money is reportedly being used by corporations to give their executives large bonuses, to pay stockholder dividends and, amazingly enough, to finance the purchase of other companies.

These people are the ones that really upset me. These are the people who are running our economy, and they are treating it like their private playground. They see no larger purpose in anything they do other than to continue to enrich themselves. Even being caught and castigated in public, by Congress, doesn’t really reach their stunted psyche. They have no understanding, no concept, that this is not about them. They fully believe that it is their right to grab as much as possible for their own. I actually think that they do no understand why anyone might be upset with this behavior, that’s how far gone they are.

In my mind, these are the monsters in our society. These are the villains. It isn’t the people who would like to marry other people of the same sex. It’s these assholes in charge of the corporations of America. Oh, yes. They do provide the cogs that run our economy and have given us our high standard of life here. But I believe that the “industrial magnates”, to use a term from the Gilded Age, only see this as a side benefit. Their main purpose is to continue to enrich themselves. We may not have the same high-profile robber-barons of that era, such as J. P. Morgan, Cornelius Vanderbilt, John D. Rockefeller and Andrew Carnegie. But we certainly have the same mindset prevalent in leaders of today’s industry. Their mantra seems to be, “Get as much as you can, and it doesn’t really matter how you do it.”

I really don’t know how some people live with themselves.

The chickens of financial imprudence are coming home to roost with a vengeance.

I will be the first to admit that I am very unlearned in financial matters. I think that was one reason I went into engineering in college. I realized my financial knowledge, and interest, pretty much maxed out at balancing my own budget. Over my lifetime, I have actually been very good at that. I seem to have an inborn sense of what is and is not wise to do when it comes to money. But that is about the extent of my knowledge.

However, I don’t feel that is in any way a limiting factor when it comes to commenting on the insanity going on in Wall Street and the financial markets. Really, doesn’t having a blog really compel you to say something, in no uncertain terms, about a subject that you know next to nothing about? Everyone else does it. My only variation on this is that I am saying, up front, that I have absolutely no credentials on this very complex topic.

That said…, Jesus H. Christ!! The collapse of Bear Stearns, Lehman Bros., Merrill Lynch, along with the takeover by the federal government of Fanny Mae and Freddy Mac, all in the space of a couple of weeks, has the look and feel of a major meltdown of our financial institutions. (I completely forgot about Washington Mutual and AIG. Just too many to keep up with, which isn’t a good sign.) To the know-nothing outsider like me, it is mind-bending in the extreme. How can these major, major players resemble the Titanic after ramming an iceberg? This is not doing much to instill confidence in much of anything these days.

Here and here are a couple of nice posts from Americablog that do a good job in summarizing the “what?” and “what the heck?”

Here is a chilling quote from Part 1 of these two articles.

Let them fail or else they will drag us all under water with bad debt. Investor Wilbur Ross is saying that we could possibly see 1,000 banks in US fail as they did after the John McCain Keating Five/S&L crisis in the 1980s. The flashy banks and financial services companies all wanted the rugged free enterprise system for those with the least but CEO socialism for those at the top. Let them go under and let them live with the consequences, just as the rest of Americans who have been on the receiving end of the credit crisis.

1000 banks… Whew. This highlights one thing, among many, that I find completely baffling about this. Conservatives still insist that government regulation of industry, ANY industry, is a bad thing and everything will be just dandy if everyone would just leave business alone. These people are in deep, deep denial. There just seems to be a fundamental disconnect operating in the psyche of Corporate America. Regulation, and anything else that might impede on the ability of Corporate America to make as much money has possible, as fast as possible, is a bad thing. Yet, no matter how irresponsibly things are run, there are always reasons why it is not the business of government to try to put the brakes on. Yet, when these businesses finally DO get into deep trouble, then it immediately becomes the business of the federal government to go do something to prop them up or bail them out. Why is that? Yes, I know that lost jobs and lost assets could really cause some turmoil. But if government, by definition, can play no role in how these companies are being run, why does it become the role of the government to help them out when they finally blow it up? That makes no sense. Yet, that is how it is supposed to work in Universe Republican.

Here is a good windup, as supplied by Pandagon.

We’re supposed to believe the following about the economy, courtesy of the GOP:

1. Everything’s fine, except the things that aren’t.

2. Everything that’s fixable is fixable by tax cuts. And those things are massive problems that could destroy American society.

3. The other things that aren’t fixable are Bill Clinton’s fault.

UPDATE: Well, that didn't take very long, did it? The federal government now owns AIG, including all their bad debt. How is this different from socialism? Why is it just the most terrible thing to contemplate government run healthcare, but it is fine to have the federal government owning Fannie Mae and Freddie Mac and now an insurance giant?

Greed is good? Not when you would like to have a working economy.

I was amazed to see Phil Gramm’s statement of a week ago about the U.S. being “a nation of whiners” about the economy. He was rightfully smacked down by a lot of people. That story was even sort of mentioned in passing by the MSM! That’s pretty amazing, considering the love affair the media has with John McCain. Gramm has now resigned from the McCain campaign, except he will probably remain hanging around “to advise” McCain. And, of course, the whole thing was blamed on Democrats, because, as we all know, Democrats would rather make personal attacks than concentrate on real issues. That’s extreme sarcasm, if you couldn’t tell.

I use that whole incident as the preface to my real subject of today, which is the fact that huge amounts of people are losing their homes and other possessions bought with credit they couldn’t really afford. There were three separate stories today in the Seattle Times about this. The first one, which I want to quote from here in a second, has to do with the predatory lending practices by practically the entire U.S. lending industry. The second has to do with the problems that people who wish to sell their homes at less than they owe on the house. The third is about how people are just walking away from “luxury” assets, such as boats, RV’s, snowmobiles, etc., which required large loans to finance.

Here are some passages from the first story that really struck me hard.

The lucrative lending practices of America's merchants of debt have helped lead millions of Americans — young and old, native and immigrant, affluent and poor — to the brink. More and more, Americans can identify with late 19th- and early 20th-century miners in debt to the company store, with little chance of paying up.

It is not just individuals but the entire economy that is now suffering. Practices that produced record profits for many banks have shaken the nation's financial system to its foundation. As a growing number of Americans default, some banks are recording hundreds of billions of dollars in losses, devastating their shareholders.

..snip..

But behind the big increase in consumer debt is a major shift in the way lenders approach their business. In earlier years, actually being repaid by borrowers was crucial to lenders. Now, because so much consumer debt is packaged into securities and sold to investors, repayment of the loans takes on less importance to those lenders than the fees and charges generated when loans are made.

Lenders have found new ways to squeeze more profit from borrowers. Though prevailing interest rates have fallen to the low single digits in recent years, for example, the rates that credit-card issuers routinely charge even borrowers with good credit records have risen, to 19.1 percent last year from 17.7 percent in 2005 — a difference that adds billions of dollars in interest charges annually to credit-card bills.

Average late fees rose to $35 in 2007 from less than $13 in 1994, and fees charged when customers exceed their credit limits more than doubled to $26 a month from $11, according to CardWeb, an online publisher of information on payment and credit cards.

Mortgage lenders similarly added or raised fees associated with borrowing to buy a home — like $75 e-mail charges, $100 document-preparation costs and $70 courier fees — bringing the average to $700 a mortgage, according to the Department of Housing and Urban Development. These "junk fees" have risen 50 percent in recent years, said Michael Kratzer, president of Feedisclosure.com, a Web site intended to help consumers reduce fees on mortgages.

"Today the focus for lenders is not so much on consumer loans being repaid, but on the loan as a perpetual earning asset," said Julie Williams, chief counsel of the Comptroller of the Currency, in a 2005 speech that received little notice at the time.

So, just to recap. Lending institutions now regard their principle method of making money from loans NOT from the interest they charge. No, they view their main method of making money is jacked up interest rates on adjustable rate loans, late payment fees and the accompanying exorbitant interest rates that the loan bumps up to when even a single payment is late. They do not consider having loans paid off on time as important as collecting penalty payments. In fact, they would rather you not pay them off on time.

The entire industry is based on having consumers of their credit products being in some sort of financial difficulty that ranges from just being late on their payments once or twice to being in dire straits, not being able to pay off at all and losing their homes or other things they purchased with credit.

I do not see how any industry can be so shortsighted. This entire house of cards, and that is what this is, is built on the unstated premise that consumers in this country will remain in a state of perpetual indebtedness but will still continue to pay their financial “obligations” and not default on their loans altogether. And no one apparently ever considered the possibility that this would happen on a huge scale, such that the entire underpinnings of the lending industry would be affected in such as way as to result in huge corporations having to be bailed out by the federal government. The full effects are still yet to be shaken out.

This is the same thought processes behind the insurance industry, where one of the first priorities of insurers is to find some way to get out of paying their policyholders when legal claims are made against those policies. They will play games with semantics, they will use every single method they can conceive of to get out of paying off their customers, because that would affect what they see as their earned profits. There is very little time spent, at the high levels of these companies, about the pain, anguish and human suffering is caused by their single-minded pursuit of keeping every single dollar that comes within their grasp.

I have news for those Republicans, like Gramm, who believe that an unfettered, unregulated business environment is somehow, for business, on par with the Ten Commandments, handed down to Moses by God, chiseled in stone. Not only are you showing that you have very little humanity and compassion within you, your entire basis for raking in huge piles of dough when you already have huge piles of dough only works for the short term. You have absolutely no idea about how to assess future impacts of your single-minded pursuit of as much money as absolutely possible. You don’t even consider that you may be undermining your entire cause by your current actions.

I find that incomprehensible as well as bloodless and shows just an astonishing amount of greed that drives their entire thought process. Anyone who doesn’t take possible consequences of their actions into account before you set off on some task deserves what they get. Please note that this same thinking, or lack thereof, is evident in Bush’s war planning in Iraq, or lack thereof. The Iraqis will welcome us as liberators; the oil revenues will pay for the war… Everything will be ponies and ice cream.

The huge problem in this, of course, is that all these ramifications that they didn’t consider do not just hit them. They are hitting the entire country. The rich and powerful will usually survive any bad times. It’s the rest of us that have to pay for their lack of thought and imagination in their quest for more money, more power, etc., etc.