Blue Collar Workers Hanging By a Thread

They arrive for work at 7:25 a.m. and many of their cars are rusting buckets of crud. Except for the boss’s. He drives a Volvo.

Walk in the door at Schaefer Screw Products and there is the enemy — the clock. The oil vapors and solvents are overwhelming. The yellow light is dispiriting. The workers don’t want to be here. The liquor bottles in the weedy lot out back tell part of the story. The graffiti in the bathroom — profanely denouncing “hard workers” — tells the rest.

The workers punch the clock at precisely 7:30 a.m., not a minute later since they would be docked 14 minutes and nobody in America works 14 minutes for free. A quiet resignation settles over them as the roar of the screw grinding machines rev up. Want it or not, they need to be here. After this place, there is no place. Not in today’s America.

This machine shop may be the next wobbling domino in the collapse of the American manufacturing sector and the struggles of its blue-collar workers. There are at least seven shops nearby that are available for lease.

NAFTA, the North American Free Trade Agreement, created a free trade block beginning in 1994. But that is only part of the story. The World Trade Organization (WTO) began quietly in 1995, encouraging a sort of worldwide NAFTA that all but eliminated international trade barriers. China was admitted in November 2001 and since then Michigan has lost nearly 400,000 manufacturing jobs or nearly 50 percent of its industrial work force.

For workers here, their boss is the closest they will come to THE MAN. And by THE MAN they mean the bozos in Washington, D.C., who voted for the trade agreements and the bank deregulations that let the jobs slip away and money disappear into thin air.

When they say THE MAN, they mean the wolves on Wall Street who amplified the housing bubble and nearly took the world economy down. Instead of paying the price and going out of business and collecting their own unemployment checks, the Wall Street wizards got a multibillion-dollar bailout and bonuses.

Goldman Sachs, which was a heartbeat away from failure in 2008 and received $40 billion in federal aid, paid out $16 billion in bonuses and compensation in 2009 — an average of nearly $500,000 per employee. The bank paid just $14 million in taxes.

At the same time, Deutsche Bank forecasts that a quarter of homeowners are underwater and RealtyTrac.com reported 315,000 foreclosures in January, the most for that month on record. Many economists are predicting a bleak year in the housing market if wages and unemployment don’t improve.

“You feel the whole thing’s a swindle,” says Cindi Borbi, the 59-year-old account manager behind a desk in a cloud of cigarette smoke. Her husband took his life last year after being let go from his auto supply firm. He left his wife a broken heart, a mound of debt and a house she can’t pay for. “I’m looking for a basement if you’ve got one.”

Money Fueled Evil in Detroit

In the end, it’s all about the money and getting more of it.

Money is the reason Monica Conyers, the former City Council president, is headed for 37 months in a federal prison, convicted of taking bribes from Synagro Technologies Inc. in exchange for her vote. She wanted more of it, her “loot.”

Money is the reason that Detroit’s disgraced former mayor, Kwame Kilpatrick, is furiously trying to keep from going back to jail for violating probation, chiefly for hiding money he could have used to repay $1 million in restitution to the city he claims to love. His ardor has limits when weighed against the prospect of losing the good life and being indicted by the feds.

Like so much else in the rotten political culture that helped lead Detroit to the brink of collapse, it was all about them. It was about enriching them, about power for them, about perks and prestige for them, as watching Conyers preside over a council budget hearing could attest.

Seldom if ever was it about the people who elected them to represent the public, a quaint notion largely out of fashion in modern politics. The deepening plight of their city, or the fiscal wreck, or the structural rot, or the unpredictability of it all to business leaders and regional political players? Not so much, even though both of them, in their own ways, helped to foster it all.

The falls of Conyers and Kilpatrick, each endowed with powerful names in Detroit political circles, are only just beginning to reverberate. But if they pave the way for more responsible, more competent, leadership, they each will have performed at least one valuable public service.

Credit Card Payment More Important Than House Payment?

In an unprecedented shift, for some consumers having a credit card in good standing appears to have taken priority over having a roof over one’s head, experts said.

While overall consumer debt rose unexpectedly in January, consumers continued to pay off their credit cards that month — a record 16th straight month of lower credit-card debt — with such debt dropping about $1.7 billion to $864.4 billion, according to the Federal Reserve on Friday.

But a small slice of those consumers are paying down credit cards to the detriment of their mortgage loan. The number of consumers delinquent on their mortgages but current on their credit cards rose to 6.6% in the third quarter of 2009 from 4.3% in the first quarter of 2008, according to a TransUnion study of 27 million anonymous consumer records pulled randomly from its database. Meanwhile, the portion of those who fell behind on credit-card payments but paid their mortgage dropped to 3.6% from 4.1%.

The trend is more common among consumers with the lowest credit scores. The percentage of consumers with low scores who paid credit cards rather than home loans shot up to 29% in the third quarter of 2009 from 19.1% in the fourth quarter of 2007, according to TransUnion. And in that low-credit-score group, consumers falling behind on credit cards but keeping pace with mortgage payments declined to 14.5% in 2009 from 18.1% in the first quarter of 2008.

Let’s Rethink How We Punish

Patricia Caruso, head of the state Corrections Department, offered one of my all-time favorite quotes when she said a few years ago of Michigan’s swelling prison population: “We need to decide who we’re afraid of and who we’re mad at.”

We’re running out of time to make that decision. Michigan is releasing about 2,000 additional prisoners this year to trim the Corrections budget. Among their ranks are killers, assaulters, robbers and an assortment of other despicable characters who have served their minimum sentences, but could be held longer under Michigan law.

Next year, the stream becomes a flood, if the Legislature approves Gov. Jennifer Granholm’s budget. The governor wants to free 7,500 more inmates by rewriting sentencing guidelines.

It’s a budget move, and one I support. Michigan is broke and getting broker. It doesn’t have the luxury of being as harsh on crime as perhaps it would like.

This issue isn’t going away. Michigan must commit to a smaller inmate population for the long haul. So, going back to Caruso’s quote, we ought to use this opportunity to radically rethink how we punish.

Nonviolent offenders should not be behind bars, unless they present a habitual threat to property. Nor should those who have lived an otherwise law-abiding life but through a lapse of judgment took a one-time swerve from the straight and narrow.

We’ve got to reserve our prison cells for the really scary guys and find alternative ways to punish everyone else.

Senate Passes Unemployment Benefit Extension

The Senate voted Tuesday to pass a $10 billion measure to extend benefits for unemployed workers and fund road projects after Sen. Jim Bunning agreed to end his filibuster.

The 78-19 vote on the 30-day extension known as H.R. 4691 came minutes after the Kentucky Republican made a final plea on the floor of the Senate for his colleagues not to borrow the money.

President Obama praised the effort after signing the bill late Tuesday.

“The bill passed tonight by the Senate will extend access to health care benefits for workers who have lost their jobs, help small businesses get loans so they can grow and hire, and extend unemployment insurance benefits for millions of Americans who are looking for work,” Obama said. “I’m grateful to the members of the Senate on both sides of the aisle who worked to end this roadblock to relief for America’s working families,” the statement said.

Unemployment Extensions to Millions Still Locked Up in Political Games

Jobless benefits suddenly ended for some laid-off workers, Medicare payments to doctors were delayed and 2,000 federal transportation workers were sent home Monday in a spending dispute tinged with election-year politics.

Adding its voice to the flap, the White House said it was trying to “shame” Republican Sen. Jim Bunning of Kentucky for single-handedly blocking the $10 billion extension. Bunning said he opposed the extension because it would add to the budget deficit, already projected to hit a record $1.56 trillion this year.

Most laid-off workers receiving unemployment benefits won’t be affected — unless the impasse drags on — but those seeking payment extensions won’t be able to obtain them.

With the nation’s highest unemployment rate at 14.6 percent in December, Michigan’s jobless ranks far outstrip the nation, which has an average 9.7 percent jobless rate.

“We have the highest unemployment rate in the country, and middle-class families are struggling to put food on the table as workers continue searching for new jobs and train for new careers,” Sen. Debbie Stabenow, D-Lansing, said in a statement. “These workers and their families cannot afford to wait for help.”

Obama is no FDR, We’re no Mass Movement.

It’s open season on Obama whom so many hoped would lead us out of the neo-liberal wilderness. He once was a community organizer and ought to know how working people have suffered through a generation of tax breaks for the rich, Wall Street deregulation, and unfair competition.

When the economy crashed he was in the perfect position to limit the unjustified pay levels on Wall Street and bring a crashing halt to the runaway financialization of our economy. Instead we got a multi-trillion dollar bailout for Wall Street, no health care reform, no serious financial reforms whatsoever, record unemployment, and political gridlock that’s will be with us for years to come.

Is it his fault? Or ours?

Obama has made his share of blunders. However, his statement that we “don’t begrudge” the high salaries on Wall Street because that’s part of the “free-market system” is about the dumbest thing he’s ever said. He was referring to Jamie Dimon’s $17.4 million payday, and Lloyd Blankfein’s $9 million.

But surely the President knows that at this very moment Wall Street is still receiving $10.4 trillion (not billion) in subsidies from the taxpayer — and that’s after the TARP repayments. That’s some free-market.

Dimon’s JP Morgan Chase still has a $34.3 billion subsidy, and Blankfein at Goldman Sachs is sitting on $23.9 billion of government welfare. (Many thanks to Nomi Prins for her first rate sleuthing.. ) Dimon and Blankfein would love to re-write history so that they could be portrayed as swashbuckling entrepreneurial survivors, men who avoided the bad risks that felled so many others.

But without government welfare their institutions would have gone under. They are two very lucky (and well connected) welfare recipients — lucky not to be among the 28 million Americans that go without jobs or are forced into part-time work.

We can moan all we want about Obama’s shortcomings, the mistakes his Administration has made and his inability to take on Wall Street.  But we haven’t exactly applied a lot of heat. A million people on the mall demanding “Jobs Now” along with serious Wall Street reforms might help. A million people showing up repeatedly might actually get the job done.

The free market on Wall Street is dead and has been for a long time. It’s been replaced by a billionaire bailout society that will provide decades of chronic unemployment and on-going bailouts for the super-rich. It’s a damn shame Obama can’t deal with it. It’s a bigger shame that we won’t force him too.