Political Economy category archive

Reuters:

Citigroup, which is trying to cut $50 billion of expenses next year, has decided to stop leasing the elaborate (model train-ed.) display that for two decades has run in the bank’s headquarters building in midtown Manhattan during the holiday season.

The display will be dismantled after the holidays and won’t be back next year.

The savings for Citigroup? About $240,000 in 2009.

$240,000.

This is the same outfit who gave their retiring CEO $29,500,000 last year.

The big banks have been run by empty suits.

Thoughts on an auto bailout:

. . . I am an incredibly reluctant supporter of the bail-out, not because I think it’s a good idea but because letting a US car company go bankrupt would be an incredibly bad idea. As a result, I would attach a ton of conditions to the money. For example, mileage standards would have to improve big-time. The big three’s reliance on the SUV business model would go bye-bye. Executive compensation would have to be cut until the companies showed a profit (personally, I would propose a package and then subtract the total compensation for the last 5 years for the Board of Directors and Executives from the package total because these guys clearly didn’t earn that money). Major financial cuts at all levels would happen. That means executive fly coach and rent compact cars on business trips. Downsizing from a physical plant and personnel perspective is a must. Simply put, the car companies would still have to face major restructuring. It’s simply unavoidable at this point; the US auto industry would look very different when this is all said and done.

The curtain descends:

After 58 years and more than 200 productions, the Baltimore Opera Company will file for Chapter 11 bankruptcy-law protection today amid dwindling ticket sales and contributions.

Via NPR.

Bonddad. Follow the link for the analyses behind his conclusion (emphasis in the original):

. . . for everybody out there who is saying “there is no organized central plan to this problem” — there isn’t one available. There is no book out there that says, “this is how you undo years of financial damage in 3 easy steps.” It just doesn’t exist. There are a lot of armchair economists out there saying this is a bad idea or that is a bad idea. What these people are forgetting is the previously made point — no one has a clear plan on what to do because one doesn’t exist. It’s that simple.

The point of the previous two paragraphs is to point out that we are in clearly uncharted waters in a big way. There are no rules that apply — we’re trying to figure this thing out as we go along. Also remember that no one in the incoming administration has a crystal ball either. While there are a lot of very smart and capable people out, there don’t have the magical “how to fix this crisis in three easy steps” book either. In other words — it’s going to be a long and difficult road going forward.

I wouldn’t want Mr. Obama’s job for the world.

This weekend, I went to Connecticut.

In these parts, that means driving the New Jersey Turnpike, at least if you want to get there the same day you start out (and pray that two vehicles on the NJT don’t try to occupy the same spot at the same time, or you’ll just get to your destination tomorrow).

I’ve driven the NJT many times. From Trenton up until about Exit 11 (the Garden State–any time I’m headed for New England, I take the NJT to the Garden State to the Tappan Zee Bridge–I’m not driving through Manhatten on a bet; a New York City cab is one of the Great Bargains in the World), it is lined with distribution centers warehouses.

The last time I went up that way, a couple or three years ago, all the warehouses were in use and trailers were backed up to the loading bays to discharge and receive loads and commercial developers were building new warehouses on spec.

This time, well, if you want to pick up a vacant warehouse cheap, the NJT corridor is the place to go.

Along about exit 8, NJT separates into car only and car/truck/bus lanes. I usually take the car/truck/bus lanes, because, by God, if I die in a firey crash on the Turnpike, I at least want it to be at the hands of a professional driver, not at the hands of some idiot kid trying to make it from Washington to New York City in 35 minutes.

Funny thing:

I’ve probably made a couple dozen round trips through that part of the turnpike in the past ten years. Usually, weekday or weekend, the car/truck/bus lanes are choked with trucks.

The other day, on my drive north, I saw only a few long-haul truckers; most of the trucks were local delivery guys or local trash haulers.

Today, driving south, for the length of the turnpike from the Holland Tunnel to Trenton, I saw no more than three long-haul truckers. Mostly, the car/truck/bus lanes were like the car only lanes, except more sedate.

No jobs, no money, no credit, no customers.

No customers, no wares.

No wares, no warehouses.

No warehouses, no trucks.

Republican Economic Theory triumphant.

Also posted, with slight edits, at the Great Orange Satan.

Mithras explains.

The Great Orange Satan has more.

Via Susie.

And no accountability for banks either.

Sherrod Brown on the Rachel Maddow Show:

Move along folks. Nothing to see here.

DuPont Co. is slashing jobs and cutting costs as the company navigates through a global recession it expects to continue through much of 2009.

The company said Thursday it plans to cut 2,500 jobs — about 4 percent of its work force — in the next year. DuPont is also cutting 4,000 contract workers by the end of this year, with more contractors expected to be cut next year.

Nothing.

The logical outcome of making the rich richer and the poor poorer–Robert Reich on the “Great Crash of 2008”:

Even more important, investors are starting to fathom the emptiness of American consumers’ wallets. . . . In other words, consumers have gone on strike.

Why have they gone on strike? Not because of the difficulty of getting credit. Most consumers can barely afford to pay the interest charges on the debt they’re already carrying. Consumers have gone on strike because their earnings haven’t kept up. The recovery that officially ended December, 2007 (the National Bureau of Economic Research now tells us) was the first on record in which median earnings declined, adjusted for inflation. Since then, many people have also lost their jobs or are working part time when they’d rather be working full time, or else know they’re in danger of losing their jobs.

John Cole pretty much sums it up.

What have I been saying all along? And I was late to the party because I’m a nobody and this blog is just a hobby:

The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents.

Follow the link. Read the whole thing. Lots of persons foresaw the logical result of Bushonomics and warned about it.

And King George the Wurst deferred to the bankers. You know, the ones who are now bankrupters.

The Republican Party, in service to privilege since 1868.

The local economy:

Only one sector is booming in this city of nearly 73,000 people, the largest city in the state and the urban hub for New Castle County, with its 525,587 people. The federal bankruptcy court in Wilmington, considered the top forum for big corporate reorganizations, is the busiest since the last recession in the early part of the decade. Bankruptcy lawyers are working long hours to handle the caseload.

Management sucks, the working stiff gets, well, you get the drift.

Walter Brasch lays it out at ASZ.

By screwing up the economy so much that illegals are going home on their own.

But they don’t tell you who’s on it:

The FDIC identified 171 problem banks as of Sept. 30, the most since December 1995, compared with 117 in the second quarter. The agency does not identify the problem banks.

. . . promised Herbert Hoover.

By the end of his administration, not only were there no chickens.

There were no pots.

Sort of like today.

The 200 pantries served by nonprofit Food Bank have seen a 41 percent increase in need this year, Traore said. Shelves are often bare at the Pennsauken warehouse.

Food Bank officials estimated that Burlington, Camden, Gloucester and Salem County residents would require four million pounds of food in 2008, but as of Oct. 31, the warehouse already had distributed 4.2 million pounds.

My daughter worked here. Now it might go dark.

Brandywine School District officials told the school board Monday that the long-running radio station at Mount Pleasant High School might have to sign off for a while as its fate is determined in a district cost-cutting measure.

Looking for ways to save money in a tight economy, the district is giving closer scrutiny to WMPH, a 100-watt radio station at the school that first went on the air in 1969.

I guess WMPH can’t expect a blank check from Uncle Sugar. It needs maybe a few hundred bucks.

But it’s in a school. Not in a mega-bank. And nobody there wears a three-piece suit or has a private jet.

Definitely not bailout material.

Robert Reich on the CitiBank thingee:

If you had any doubt at all about the primacy of Wall Street over Main Street; the utter lack of transparency behind the biggest government giveaway in history to financial executives, and their shareholders, directors, and creditors; and the intimate connections the lie between Administrations — both Republican and Democratic — and the heavyweights on Wall Street, your doubts should be laid to rest.

(snip)

Meanwhile, more than a million workers in the automobile industry, along with six million homeowners in danger of losing their homes, and a millions of Americans who depend on small businesses and retailers for paychecks, are getting nothing at all.

A song, just as much for these times as for those:

Conclusion: We’re not there yet.