From the "Never worked a day in his life" department

NY Times:Cities Shed Middle Class, and are Richer and Poorer for it

SOME big American cities are flourishing as at no time in recent memory. Places like New York and San Francisco appear to be richer and more dazzling than ever: crime remains low, new arrivals pour in, neighborhoods have risen from the dead. New York is in the throes of the biggest building boom in 30 years, its population at an all-time high and climbing. Mayor Michael R. Bloomberg proudly promotes his city as “a luxury product.”

But middle-class city dwellers across the country are being squeezed.

This time, they are being squeezed out by the rich as much, or more so, as by the poor — a casualty of high housing costs and the thinning out of the country’s once broad economic middle. The percentage of middle-income neighborhoods in metropolitan areas like Los Angeles, Chicago and Washington has dropped since 1970, according to a recent Brookings Institution report.

The percentage of higher-income neighborhoods in many places has gone up. In New York, the supply of apartments considered affordable to households with incomes like those earned by starting firefighters or police officers plunged by a whopping 205,000 in just three years, between 2002 and 2005.

.........

Of course, cities need police officers, firefighters, teachers. But as long as they can get the labor they need from somewhere nearby, some economists say, middle-class shrinkage may not hurt. In Southern California, developers import construction workers from Las Vegas and put them up in hotels; costs go up but rich clients can pay. Firefighters who want to live in high-priced cities can work two jobs, said W. Michael Cox, chief economist for the Federal Reserve Bank of Dallas. “I think it’s great,” he said. “It gives you portfolio diversification in your income.” Pay for essential workers like plumbers and cabdrivers will tend to go up, he said.

If working two jobs to put a roof over your head is a good thing, why doesn't Mr. Cox give it a whirl and see how much he appreciates the "portfolio diversification of his income"? Who needs to see the wife and kids?

When you don't know what you don't know, you don't know nuttin'

Interesting interview with David Gunn, former head of Amtrak on the Philadelphia Inquirer website.

CAPE BRETON, Nova Scotia - Even now, David Gunn isn't sure who in the Bush White House wanted to kill Amtrak. What he does know is that Amtrak's opponents came very close to getting their wish.

As the Bush administration threatened to cut off funding last year, Gunn, then Amtrak's president, and other Amtrak managers feared that the beleaguered national rail line would collapse financially or that passenger safety might be jeopardized.

Gunn was fired Nov. 9 in a dispute with the Amtrak board over how to modernize the rail line. He said in an interview on his Nova Scotia farm that he warned the Bush administration that its threats to force Amtrak into bankruptcy could prompt suppliers to demand cash and creditors to seize assets, effectively shutting the rail line down.

.....

The way the Bush administration managed Amtrak "is almost a microcosm for the whole bloody administration, because it is what they have done everywhere," said Gunn, a Republican. "It has gotten them in trouble with FEMA; it has gotten them in trouble with Iraq. They just don't trust their own management."

.....
How to do that has become a huge issue. Arguing that Amtrak was an outmoded relic, administration officials last year threatened to withhold money to force the rail line's restructuring.

But Gunn said the strategy came close to backfiring. Vendors began demanding cash, an insurer resisted renewing vital liability coverage for Amtrak officers, and directors and Amtrak auditors declined to certify its financial statements.

The standoff caused Moody's Investors Service to downgrade Amtrak's debt rating, and threatened to prevent needed repairs to failing track switches, overhead power lines, bridges, and other critical infrastructure, Gunn said.

After decades of deferred maintenance, some track switches had become so unreliable that Amtrak had to assign staff to monitor them 24 hours a day. Gunn said Amtrak eventually made the necessary repairs.

"What we said was, 'Look, we have trains running at 150 miles an hour - you have human beings riding that stuff,' " Gunn said.

Throughout his conflict with the administration, Gunn said senior transportation officials repeatedly suggested that Amtrak could revitalize itself by filing for Chapter 11 bankruptcy protection - like a bankrupt airline, it could void its labor contracts.

"Oh, I think they felt... somehow, out of the wreckage, would come a new company," Gunn said.

But he said that bankruptcy for Amtrak could have caused a service shutdown - in a way it never would for an airline - because of the nature of the passenger rail business, which is mostly unprofitable and lacks competition.

Amtrak was formed from the remains of several bankrupt private passenger lines in 1970. It is responsible for service in the heavily traveled Northeast Corridor between Washington and Boston, as well as on 16 long-distance lines traversing much of the country.

Amtrak also provides service on shorter-range lines in Pennsylvania, New York, Michigan, California and other states, which share the costs.

It has never turned a profit, and requires billions of dollars in government subsidies.

And that is the problem, Gunn said. Because no other company has Amtrak's experience running a national passenger rail service, Gunn said it was highly improbable that any other rail line could have stepped in had Amtrak gone out of business. The airline industry offers no comparison, he said, because its losses are smaller and another airline is always available to take over the business of companies that fail.

.......
Gunn took over as head of Amtrak on May 15, 2002, and quickly moved to cut costs, establishing a new bookkeeping system that gave managers a clearer idea of how much money they had and how much various Amtrak operations cost. Before he arrived, Gunn said, the rail line was charging as much as $200 million a year of day-to-day operational costs to accounts set aside for replacing bridges, rail and other infrastructure.

Among financial auditors, the practice is considered a transgression roughly comparable to a homeowner's taking out a second mortgage to pay for food and clothing.

For a time, Amtrak stabilized. Gunn reduced staffing, and began repairing aging bridges and neglected track. But his relationship with the administration abruptly changed when the White House budget cut Amtrak's federal funding from $1.2 billion to zero.

Amtrak's vendors - companies that furnished fuel oil, food and other supplies, debt holders, and rating agencies - were startled.

Its auditor, KPMG, declined for months to sign off on its financial statements or to certify that Amtrak would make it through another year. That meant Amtrak risked being in default of its loan agreements, raising the prospect that creditors could seize assets such as the high-speed Acela train, Gunn said.

But he maintained that the Bush administration never took the possibility of collapse seriously, although its officials seemed to take every opportunity to make matters worse.

After the administration released its budget, the Amtrak board of directors barred Gunn and other rail managers from asking Congress for money, as they had in the past.

In May, in another move that Gunn interpreted as a tightening of the financial vise, Mineta wrote Gunn to inform him that the Transportation Department would withhold about $60 million in cash reserves until the department was sure Amtrak would survive. Gunn and the Transportation Department agree that Congress required Mineta to inform Gunn that the money would be withheld to pay for shutdown costs if the rail line failed.

But Gunn said Mineta greatly complicated matters by releasing the letter to the public. Vendors deluged the rail line, demanding cash. Particularly concerned, Gunn said, were the credit card companies that Amtrak customers used to purchase their tickets.

He said Amtrak managers worried that those companies might demand faster payment or, worse, require Amtrak to post as much as $100 million in reserves to insure payment if Amtrak went bankrupt. Gunn said the credit card companies never forced the issue, but if they had, Amtrak would have been bankrupted.
........
"We managed our way through; it wasn't them [the Bush administration]," Gunn said. "They didn't do anything to help us. They did a lot to hurt us."

When you have to remind someone there are human beings riding passenger trains, it seems like there is not much basis for hope. Maybe the administration will get its wish soon and bankrupt Amtrak. When the Northeast corridor comes to a halt and the already overloaded roads and highways in the region are even more jammed (and many people just cannot get to work at all) I'm sure it will enhance their reputation as competent administrators of the public good.

Bread and Circuses

The Nation:Born-Again Rubinomics

When Robert Rubin speaks his mind, his thoughts on economic policy are the gold standard for the Democratic Party. The former Treasury Secretary, now executive co-chair of Citigroup, captured the party's allegiance in the 1990s as principal architect of Bill Clinton's governing strategy, the conservative approach known as "Rubinomics" (or less often "Clintonomics"). Balancing the budget and aggressively pushing trade liberalization went hard against liberal intentions and the party's working-class base. But when Clinton's second term ended in booming prosperity, full employment and rising wages, most Democrats told themselves, Listen to Bob Rubin and good things happen.

So it's a big deal when Robert Rubin changes the subject and begins to talk about income inequality as "a deeply troubling fact of American economic life" that threatens the trading system, even the stability of "capitalist, democratic society." More startling, Rubin now freely acknowledges what the American establishment for many years denied or dismissed as inconsequential--globalization's role in generating the thirty-year stagnation of US wages, squeezing middle-class families and below, while directing income growth mainly to the upper brackets. A lot of Americans already knew this. Critics of "free trade" have been saying as much for years. But when Bob Rubin says it, his words can move politicians, if not financial markets.

Rubin has launched the Hamilton Project, a policy group of like-minded economists and financiers who are developing ameliorative measures to aid the threatened workforce and, he hopes, to create a broader political constituency that will defend the trading system against popular backlash. A strategy paper Rubin co-wrote defines the core problem: "Prosperity has neither trickled down nor rippled outward. Between 1973 and 2003, real GDP per capita in the United States increased 73 percent, while real median hourly compensation rose only 13 percent."

Astorm is coming, Rubin fears. He wants a new national debate around these facts. In an interview, he explains the danger he foresees for global trade: "Where there's a great deal of insecurity, where median real wages are, roughly speaking, stagnant...where a recent Pew poll showed 55 percent of the American people think their kids will be worse off than they are, I think there is a real danger of heightened difficulty around issues that are already difficult, like trade.... Look at the difficulty around immigration."

Princeton economist Alan Blinder, a Hamilton participant and Federal Reserve vice chair in the Clinton years, describes the "difficulty" in more ominous terms: "I think the prospects for the liberal trade order are not great," he says. "There's a whole class of people who are smart, well educated and articulate, and politically involved who will not just sit there and take it" when their jobs are moved offshore. He thinks CNN commentator Lou Dobbs, who has built a populist following by attacking globalization and immigration, "is just the beginning--nothing compared to what's going to happen in the future."

What should we make of Rubin's heightened concern for the "losers" who, he now recognizes, include a vast portion of the populace? Many view the Hamilton Project as just more talk-talk. I regard it as an important event--a "course correction" in elite thinking that, given Rubin's influence, may reshape the familiar trade debate, at least among Democrats. Rubin's central objective, however, is to control the terms of debate: to address the economic disparities globalization has generated but without disturbing anything fundamental in the global system itself.

His program consists mostly of familiar ideas that might soften the pain for displaced workers. But I doubt the Hamilton proposals will do much, if anything, to reduce the global forces that are depressing incomes for half or more of the American workforce. Even Rubin is uncertain. When I ask if his agenda will have any effect at all on the global convergence of wages--the top falling gradually toward the rising bottom--he says: "Well, I think that's a question to which nobody knows the answer. I think the proposals and approach we are proposing are the way to get the best possible outcome for the United States in a complicated world.... But whether that's going to stop the global convergence of wages, I don't know the answer to that. I would guess the answer is no."

........

The "soft" ideas in the Hamilton Project playbook are mostly old ideas--improve education and retraining, provide "wage insurance" payments to dislocated workers, increase public investment in industrial development and infrastructure. All are worthy things to do, but they seem like tinkering around the edges. Ron Blackwell, chief economist of the AFL-CIO, observes, "What they've got going are these little ideas that sound like they are forward-looking and respond to the problem of living standards, but they don't speak to power."

The right-of-center tilt of Rubin's group is reflected in some secondary proposals that are sure to rattle Democratic constituencies: Reform education by weakening teacher tenure, linking it to student performance; reform the system for tort litigation to eliminate what Rubin describes as "vast excess today" (his own firm suffered from tort litigation when it had to pay billions to settle investor lawsuits for Citigroup's role in the financial fraud at Enron and other corporate scandals).

The "hard" economic propositions in Rubin's agenda are essentially the same ones he pushed successfully in the Clinton Administration: Balance the budget to boost national savings and thereby (Rubin assumes) reduce the country's horrendous trade deficits and enormous capital borrowing from abroad, where the creditors are led by China and Japan; advance more trade agreements if possible, but don't tamper with the trading rules or international institutions that currently govern the system.

So we keep doing what is wrecking our economy and pump up unemployment compensation, build (or repair) more infrastructure, allow corporations to stiff arm people they wrong (Bhopal here we come!), bust the teachers' unions and put them on a piecework basis (I'm sure special ed and inner city students will be well served), and spend more retraining folks to train their replacements from India. Basically anesthesia for the heart transplant donor. Oh and we're going to do all this while balancing the budget (at least until the whole edifice collapses as the bottom 95% see their income go into free fall, kinda hard to balance the budget when no one has income to tax, eh?)

Strange things

Ford Shotgun
One Word: Why?

Yahoo/AP:Feline felon suspected in glove thefts

PELHAM, NY ......As if the gardeners of Pelham don't have enough to worry about, with the rocky soil and the slugs and the big trees casting too much shade, a feline felon has been sneaking into their back yards and carrying off gardening gloves.

Goche's flower-patterned number may soon take its place on the clothesline that's strung across the front fence at Willy's home, which he shares with Jennifer and Dan Pifer, their 19-month-old son Hudson and a mutt named Peanut Chew.

Above the line is a sign that says, in words and pictures, "Our cat is a glove snatcher. Please take these if yours."

On Thursday morning, nine pairs of gardening gloves and five singles were strung up, nicely framed by the Pifers' flourishing tomato and basil plants. Willy, looking innocent, was playing with a beetle under the Subaru in the driveway and occasionally dashing after Hudson.

"This all started about the time people began working in their gardens, I guess March or April," Jennifer Pifer said. "Willy would just show up with a glove, or we'd see them on the front steps. I guess it's better than if he was bringing home dead birds."
.......
She doesn't know how far afield Willy goes to find a glove, but she has learned it takes him two trips to bring home a matched pair.

Willy, born to a stray last spring and taken in by the Pifers as a newborn, stays out some nights but seems to assemble his collection in daytime raids.
........
Willy couldn't care less about the gloves after they're captured. On Thursday he could not be enticed into a grab-the-glove game.

In winter, when gardening gloves are hard to find, Willy switches to his offseason prey, dirty socks, which he brings from the laundry room.

"We find them in the hallway, on the stairs," she said. "I used to think, `Oh, I must have dropped it on the way down.' But now I know better."

Despite his criminal nature, neighbors get a kick out of Willy. Cassone said the cat likes to accompany the mailman up and down the block, all the way to each front door. Willy also likes to climb trees and bat at the heads of people below.

Isn't this classy?

Day by Day

Let's see here, we'll equate Jack Murtha with Cindy Sheehan then we'll accuse him of being a selfish coward. Who says Republicans aren't working to elevate the discourse?

The guy may be many bad things but he's hardly a stereotypical limp wristed "other cultures are superior to ours" liberal. Could we maybe have something a bit more adult than "you're a coward/you're not a patriot" as a response to policy disagreements?

Argh!!!

Haven't posted for a while. It's amazing how 70+ hour workweeks keep one occupied. Hopefully things will settle down soon.

Get a room!

Tribune Star:Officials to address crime at Fairbanks

The Terre Haute Park Board hopes to meet with law enforcement officials June 28 to address problem activity in the northern end of Fairbanks Park, park Superintendent Greg Ruark said Friday.

Ruark said the board hopes to meet with city police Chief George Ralston and Vigo County Sheriff Jon Marvel to discuss ways park officials can minimize illegal activity in that park.

The invitation to law enforcement officials follows a police raid on Fairbanks and Mills Dam parks earlier this month in which five men were arrested for acts of public indecency.

The parks board discussed the northern end of Fairbanks Park at their Wednesday meeting, with council members recommending possibilities from closing the road leading to the north end of the park to fencing off part of the park as a preventive measure.
...........

Some City Council members at the meeting stressed that a particular segment of the population was not being attacked in addressing the recent arrests at Fairbanks Park....

Gee, I wonder what "segment of the population" they are referring to? If a guy and a gal are arrested for doing it in a park there wouldn't be any hand wringing about making a "segment of the population" feel "attacked". We'd demand an appropriate punishment and cluck under our breath about those nitwits the cops caught in the park (especially given the fact that there are a couple hotels within a few blocks). Whatever your orientation, it isn't too much to ask you take care of your needs in a private place.

This has been a well known problem in the city for years and our community "leaders" won't step up to the plate and deal with the issue. A big part of that is the university, the ever growing tumor in the center of our city, which provides a never ending supply of activists to protest on behalf of the perversion of the day (and the continual expansion of the university). Then of course there are the few members of the university community who participate in such illegal activities. Those of us who work for a living don't have the free time to go to every meeting and publicly protest every decision. We just vote. And the last two mayors have been voted out in primaries because nothing is done about the problems in the city (this is one of the very trivial ones).

Caught with their hands in the cookie jar

Autoblog: Network truck stop showdown at the Flying J

A consortium of networks including ABC, CBS, Fox, Turner Entertainment and Disney have banded together to file a federal lawsuit against the Flying J truck stop chain.

Apparently, the chain of 178 travel plazas and fuel stops has taken to substituting outside commercials for their own spots in every location that has a trucker's lounge playing a service called Plaza TV. Basically, this is made possible by a little box called the segOne 2000 LS, which detects commercials in normal broadcasts, them replaces them with new ones. In this case, trucker-specific ads for Flying J, which itself turns around and charges other companies $31,250 per month for a 30-second spot on Plaza TV.

You just have to wonder what passes through people's minds sometimes. Use someone else's programming and insert your own commercials. Gee, I wonder what will happen when "someone else" finds out about it.

JFK: the sequel

It's interesting, you've got Barack Obama, who wants to be JFK, Hillary wants to be JFK, John Edwards still has happy thoughts of being JFK and Kerry being his LBJ. But the odds of a first term Senator going to the head of the class are low. Part of the JFK legend is that he pulled off such an impossible stunt. Generally Presidents come from Governors' Mansions not down the street. But folks still try and try and try and.....

The thing is JFK's have been a pretty decent president even if he had been Governor of Massachusetts instead of Junior Senator from same. Imitating the man is more profitable than imitating the resume.

But given the long odds for Senators why do folks arrange their careers to follow that trajectory? Maybe a lack of willingness to risk being a governor? Senators may not get the big plusses a governor has in a presidential race, but they also do not face the risks. A lot of Democratic states are basket cases. I think Solomon would have a hard time making Michigan successful enough to be a good launching pad for a presidential run. Whoever replaces Ah-nold will be almost as unlikely to become president as the Austrian born bodybuilder-turned actor-turned pol. Given the woes that New York faces, who can blame Hillary for being disinterested in running the show in Albany? Plus, really building a legacy in a state often takes time, as in more than one term. By the time a pol gets to the level where they can win a Senate seat or a Governor's spot time is beginning to seem a precious commodity., so a lot of 'em head for the Senate and hope to posture enough to springboard themselves into the White House.

What an a**

FAA takes the wind out of wind farms

The federal government has stopped work on more than a dozen wind farms planned across the Midwest, saying research is needed on whether the giant turbines could interfere with military radar.

But backers of wind power say the action has little to do with national security. The real issue, they say, is a group of wealthy vacationers who think a proposed wind farm off the coast of Cape Cod in Massachusetts would spoil the view at their summer homes.

Opponents of the Cape Wind project include several influential members of Congress. Critics say their latest attempt to thwart the planting of 130 turbines in Nantucket Sound has led to a moratorium on new wind farms hundreds of miles away in Illinois, Wisconsin, Minnesota, North Dakota and South Dakota.

.......

Harnessing the wind is a clean and relatively inexpensive way to generate electricity without the troublesome byproducts of coal or nuclear power. But the vast collections of turbines--some of which are 40 stories tall--are derided by opponents as unreliable and unsightly.

Of the scores of projects proposed around the country, perhaps the most controversial has been Cape Wind. If approved, it will be the first offshore wind farm in the United States.

Most of the opposition focuses on the proposed location in a channel between Cape Cod and Martha's Vineyard, the bucolic Massachusetts vacation areas frequented by many high-profile celebrities, business executives and politicians.

Critics of Cape Wind include members of the Kennedy family, whose summer compound is on Cape Cod. Both U.S. Sen. Edward Kennedy (D-Mass.) and his nephew, Robert F. Kennedy Jr., have said the turbines would spoil the ocean views, threaten the local tourist economy and endanger migratory birds.

The younger Kennedy, an environmental lawyer and activist who has supported wind power in other parts of the country, said putting a wind farm in Nantucket Sound would be akin to placing one in the Grand Canyon or Yellowstone National Park.

"This isn't the right location, for a number of reasons," Kennedy said.

Another opponent is U.S. Sen. John Warner (R-Va.), who has tried several times to block the Cape Wind project. In a 2002 letter to the Army Corps of Engineers, Warner included a handwritten note saying he often visits Cape Cod, which he called a "national treasure."

But the project continued to move forward until late last year, when Warner, chairman of the Senate Armed Services Committee, slipped an amendment into a military spending bill. The one-sentence congressional order directs the Defense Department to study whether wind towers could mask the radar signals of small aircraft.

Since then, at the Defense Department's behest, the FAA has been blocking any new wind turbines within the scope of radar systems used by the military.

Warner's amendment also appears to have reversed the government's position on the Cape Wind proposal. Both the FAA and the Air Force had previously signed off on the project, which would be located within miles of a missile defense radar system.

"This has nothing to do with wind," said Michael Polsky, president and chief executive officer of Invenergy, a Chicago company with projects in Illinois and Wisconsin that have been blocked by the government. "It has everything to do with politics."

Warner's office did not return telephone calls seeking comment. A spokesman previously released a statement saying the Defense Department study "ensures that Congress will possess as much information as possible on wind farms' impact on military operations."

So Warner will send the FAA on a fools errand and stiff arm sustainable energy developers nationwide so he and his fat cat buddies can have a lovely(er) time vacationing at Cape Cod. Talk about NIMBY taken to the extreme. Warner is fine with his constituents living next door to a wind farm but God forbid he have to vacation in the same zip code as one. The Kennedys and Warner may not know what they can do for their country but they certainly know what their country can do for them.

Inspirational

Chicago Daily-HeraldA Carol Stream firefighter's long journey back to normal

It would be far too easy for Jerrod Goebel to just forget the past year.

Forget it ever happened. Forget about the pain. Forget the physical therapy that helped him learn to walk again.

And forget all the little details of a yearlong recovery from a car accident that killed his wife.

It would be far too easy for the Carol Stream firefighter to forget why he wanted to be a firefighter in the first place.

"It's going to be on my mind a long time," Goebel, 26, said in his Lisle home, a modest ranch at the end of a street overlooking the Reagan Tollway.

Jerrod Goebel, seriously injured in a car crash that killed his wife, returned to the Carol Stream Fire Protection District last week.

......

Just two weeks into his first full-time job as a firefighter, Goebel lay comatose in intensive care as family members prepared to bury his wife. He'd just completed eight days of department orientation and was to begin his first shift as a Carol Stream firefighter last Memorial Day.

Goebel had no insurance and an uncertain chance for survival, but his colleagues mobilized to keep his job safe.

Fellow firefighters donated sick days and covered his shifts. They took turns traveling to Rockford Memorial Hospital to keep vigil at his bedside. They organized fundraisers, took up collections and sold raffle tickets, ultimately raising $15,000 for his medical expenses and donating 720 sick hours.

...........

To be sure, Goebel's challenge isn't over. He will likely never retrieve memories of the week leading up to the accident.

The efforts of his colleagues at the fire department ensured he would qualify for the department's insurance plan. They covered his shifts during the first month after the crash so he could qualify for insurance because he needed to be on the job for a month to do so.

There's days the world seems like a pretty terrible place, then you realize 1) you don't have it that bad, and 2) there really a lot of great people out there who will go the extra mile to help someone.

Party of the Corporations

CNN - Coming Soon:The Web Toll

Welcome to the brave new Web, brought to you by Verizon, Bell South, AT&T and the other telecommunications giants (including PopSci and CNN.com's parent company, Time Warner) that are now lobbying Congress to block laws that would prevent a two-tiered Internet, with a fast lane for Web sites able to afford it and a slow lane for everyone else.

Specifically, such companies want to charge Web sites for the speedy delivery of streaming video, television, movies and other high-bandwidth data to their customers. If they get their way (Congress may vote on the matter before the year is out), the days of wide-open cyberspace are numbered.

The Republicans keep selling out their base (or at least the 99.99% that are not well connected CEOs). We may not have all the bucks, but we can still put their sorry butts back on the street. I didn't sign up for the K Street agenda. If we have to endure a few years of Democrats to purge the "for sale to highest bidder" Republicans so be it.

Driven over by Miss Daisy

CNN: Homeless men die and 2 women get rich

The ties between two elderly women and a homeless man killed in a hit-and-run were strong enough to raise police suspicions five years ago, but it took a second death with eerie similarities for police to make arrests.

Helen Golay, 75, and Olga Rutterschmidt, 73, were charged last week with eight counts of federal mail fraud for collecting more than $2 million from policies they held on the two homeless men, Paul Vados and Kenneth McDavid.

Cha-ching, or the Sound of Betrayal

Washington Post Richard A. Viguerie:Bush's Base Betrayal

As long as Democrats controlled Congress or the White House, Republicans could tell conservatives they deserved support because of what they would do, someday. Now we know what they do when they have control. Their agenda comes from Big Business, not from grass-roots conservatives.

There's the heart of the matter. The Republican Party (and the Democratic Party for that matter) consists of several factions with their own interests. You can hold such a thing together over the long haul only if the factions see their interests advancing. In the Republican Party, the Pro-Lifers aren't happy with stealth judges and Arlen Spector's chairing of the judiciary committee, the Small Government types aren't pleased with the growth of government, and the law and order Republicans aren't thrilled with the Border and the Botched Response to Katrina (not that they let the locals off the hook).

What irritates me about the administration's response to immigration

In the last 30 days the president has suddenly discovered the merits of border enforcement. Catch and release has been curtailed and now we are sending the national guard to the border (albeit in an a pretty inefficient way that will hurt readiness out of proportion with the improvement it will make to border security). Why has he gotten religion? Are we to believe it took 5 years after 9/11 for "the decider" to decide border security is important? It looks to me like posturing to give the "conservatives" cover to sign off on an amnesty bill. I'm not convinced that the president isn't going to "lose his religion" once he's gotten his way on amnesty. The president wants a legacy, fine. Build a fence, secure the border, crack down on employers, and come back in 2008 with a secure border and "earned legalization" *cough*amnesty*cough* might be OK.

The second thing is the amnesty and guest worker programs are bass-ackwards. We give lawbreakers citizenship, and law abiders temporary work visas. I'd rather see the number of legal immigrants from Mexico increased rather than an amnesty or guest worker program. Right now we allow 50,000 legal unskilled workers to immigrate from Mexico. Rather than 250,000-400,000 guest workers and 50,000 legal immigrants, why not just increase legal immigration to 300,000. Simultaneously step up immigration enforcement (deporting illegal workers) and make the law abiders the winners and the law breakers the losers. That will do more to stop the human tragedy on the border than a hundred amnesties.

The other thing I would like to see is substantial penalties for employers who use illegals so they can violate workplace safety and minimum wage laws. Give the DOJ a few thousand green cards to give away to witnesses and make the vultures pay.

This ain't your father's free trade

Morgan Stanley Economic Digest 5/19/06; Stephen Roach: A Tale of Two Asias

All this raises a profound question for the rest of the world: If India is to services as China is to manufacturing, what role does that leave for the high-cost developed world? Down the road, if India also succeeds in pushing into manufacturing while China makes successful forays into services, the same question becomes all the more threatening to the world’s major industrial economies. Protectionism is the biggest risk in all this. IT-enabled globalization is pushing economic development into manufacturing and services at a breakneck pace. Moreover, IT-enabled connectivity has increasingly transformed once non-tradable services into tradables -- and has moved rapidly up the value chain and occupational hierarchy in doing so. The result is a mounting sense of economic insecurity in the developed world that has become a lightning rod for political action that, unfortunately, has unleashed an increasingly worrisome protectionist backlash.

This is not the experience that orthodox economics understands. The win-win theory of globalization -- workers in poor countries get rich through trade but then turn around and buy things made by rich countries -- just isn’t working. That’s because both the speed and scope of an IT-enabled globalization has broken the mold of the classic theory of comparative advantage. In days of yore, it was fine -- albeit painful -- for rich countries to give up market share in tradable manufactured products. That’s because highly-educated knowledge workers could seek refuge and shelter in nontradable services. However, with nontradables becoming tradable and with educational attainment and skillsets rising rapidly in the developing world, the security of the old way has all but vanished. Sadly, that provides both the justification and the opening for protectionists.

Of course with unregulated illegal immigration many of the "last resort" low end nontradables have become tradable as well. The high rollers are going to have to choose, do they want a managed pullback from the imbalances they have created or a messy unmanaged one (which judging from history, will be quite destructive and also quite ineffective at redistribution).

Ewwww, just ewwww

TTAC:The Mitsubishi Freightliner

Mitsubishi Motors is on the ropes. US sales are in the basement. Aside from the new Eclipse and the niche-market EVO, they haven't got a winning product in sight. A line of forgettable sedans and me-too SUVs does not a viable car company make. DaimlerChrysler’s decision to pull the plug on future financial aid doesn’t bode well either. In fact, Mitsubishi is knocking on the door of bankruptcy. Desperate times call for desperate measures. It’s time for them to build a “real” pickup truck: a Mitsubishi Freightliner.

..... To make the grade and mint some money, Mitsubishi needs a full-size competitor to the Ford Super Duty.

Despite its connection to DaimlerChrysler, Freightliner isn't doing so well. Demand for their medium and heavy trucks has been soft for some time. Their foray into vans, the re-badged Mercedes Sprinter, is aimed at a narrow market niche-- a niche that's even narrower now that there's a Dodge-badged Sprinter. But Freightliner’s reputation as a maker of tough trucks is undiminished. Their Century Class trucks set new standards for comfort and luxury in heavy truck cabs. Freightliner’s Sterling (formerly Ford) trucks are probably the most efficient and durable medium and heavy trucks on the planet.

Mitsubishi and Freightliner should pool their resources and build a new, heavy-duty, full-size pickup truck, designed to compete head-to-head with Ford’s Super Duty. Freightliner has the design and engineering capabilities to create the truck. The Mitsubishi version could be sized and optioned like a Ford F250HD and F350, and the Freightliner version could cover the F350 and F450 range. Make sure it’s big enough, has all the truck amenities and a really aggressive front end, and buyers will flock to the showrooms. A real Freightliner for the price of Dodge imitation? Hard to resist.

Freightliner doesn’t make engines, and Mitsubishi doesn’t have an engine suitable for a large truck. As we’ve discussed here before, there are plenty of first-rate American parts makers who can feed aspiring automakers suitable components. Freightliner is a major customer of Cummins. The new Mitsubishi Freightliner could run on the same Cummins diesel engine used in the Dodge Ram. Alternatively, Navistar (International) has developed a new 4.5-liter V6 diesel for Ford’s F250-- that The Blue Oval abandoned. Navistar has the engine and the plants to build it, but no customers.

.........

Freightliner and Mitsubishi each have a suitable marketing channel for the truck. Freightliner could offer the product to fleet buyers who need a pickup to complement their semis and/or delivery trucks. Buyers could have the truck financed and serviced by the truck professionals at any Freightliner outlet, where employees know the commercial truck business inside out. No more hanging out at the Ford dealer waiting for mechanics to finish changing the oil on a minivan before getting to your work truck. Freightliner could also market a truck chassis in this class to motor home and ambulance builders; a market that’s currently locked-up by Ford.

Obviously, Mitsubishi’s distribution channel caters to the average consumer. Since most pickup trucks are sold for personal use, a Mitsubishi dealership would be a logical place to offer a Freightliner pickup truck for the masses. The presence of an attractive full-size truck would act as a halo vehicle, bringing buyers into the showroom (most for the first time) to see Mitsu’s other offerings. A premium truck would also have a premium margin for both dealer and manufacturer, something both companies need desperately.

The US automotive market is in flux. Only those companies willing to consider new ways of doing business are going to survive. Will Mitsubishi and Freightliner see the next decade? That could very well depend on whether or not they realize that a problem shared is a problem halved.

Just don't write about something you don't understand, K?

Freightliner has growing sales right now. Now sales will fall off a cliff in about six months for the same reason that they are surging now. New 2007 emissions rules that will make trucks $5-10K more expensive and add new technology. New Technology means something new to break (and of course something new you have to teach your mechanics how to fix). The trucking industry is still undergoing therapy and suffers nightmares from the last emissions change in October 2002. The clever folks at the EPA moved the emissions deadlines up via litigation forcing the 2004 engines to be released 18 months early. The result was lots of breakdowns and a big drop in fuel economy. So fleets, having been trained by the previous cycle (thank you EPA), are buying new trucks now while they are cheaper and less likely to break down. We go through another round of this 2010.

I'm not an expert on pickups or the pickup market, but I would imagine a DCX honcho asking "why are we going to spend all this money to compete with our own product?"

OK, Freightliner doesn't make an engine technically. But corporate cousin Detroit Diesel does (and those engines are by and large only available in DCX products (Freightliner, Sterling, Western Star, Thomas Built bus). Detroit Diesel also markets and distributes Mercedes Benz engines in the US. Just because it doesn't say Freightliner on the rocker cover doesn't mean it's not a proprietary product.

Once again though, why would DCX spend money to build another Cummins powered pickup? As far as International goes, ha ha ha. See, Detroit Diesel was an independent company. Made/makes a great fleet motor, the Series 60 which at one time had an overwhelming market share lead and was available to all manufacturers. DCX wanted to rule the world though and so they bought Detroit Diesel and made it a proprietary option. This succeeded in forcing several large trucking companies to switch brands to stay with the Fuel Sipping Series 60. So DCX and Navistar are not best buddies. Navistar International has a proprietary engine family in the light and medium duty spaces and will have one in the heavy space in 2007. Add to that they are fighting tooth and nail for the medium market on the strength of their integrated powertrains. The last thing either company is going to do is source an engine from one another.

You really don't want to take your pickup to a heavy duty diesel shop. The shop rates are much, much higher. Also, instead of waiting behind a minivan you'll be behind a truck that has to be halfway across the truck by morning. Dealers are going to take care of their bread and butter first.

What a Jackass....I mean donkey

Sen. Clinton apologizes to Chelsea for work comment

NEW YORK (AP) -- After telling an audience that young people today "think work is a four-letter word," Sen. Hillary Rodham Clinton said she apologized to her daughter.

"I said, 'I'm sorry, I didn't mean to convey the impression that you don't work hard,"' Clinton said Sunday in a commencement address at Long Island University. "I just want to set the bar high, because we are in a competition for the future."

......

The senator said that her daughter, Chelsea, phoned to complain after learning about the comments. The 26-year-old was hired in 2003 by McKinsey & Co. as a consultant, reportedly for a six-figure salary. She received a master's degree from Oxford University after graduating from Stanford University in 2001.

First, as my wife said when I told her about the article, work *is* a four letter work. It's in the dictionary, look it up.

I'm glad that Thanksgiving will be a little more harmonious at the Clinton home, but the young people she really owes an apology to are the young people who are busting their ass every day at a crappy job to feed their families. You know, the 99.9% who aren't politically connected enough to land a 6 figure job straight out of grad school. Why doesn't she find some single moms trying to support themselves on a Wal-Mart wage and let them know what she thinks of their work ethic.

Ever heard of a "hacker"?

CCJ:Is that really your driver?

Qualcomm recently announced it soon will release a Web-based vehicle security and driver management tool called Vehicle Command Control (VCC) that will integrate with the Magtec product through its OmniTracs platform. A dispatcher at the office would be able to use the VCC to manage driver authentication codes and truck identifications, change codes over the air and even disable a moving vehicle, if necessary.

Is it just me or does making an internet based tool that can disable a commercial vehicle have some risk? I mean, it's great that we can shut down a hijacked truck loaded with hazmat, but it seems this would have the potential for mischief. Say Mr. Islamo-hacker decides to shut down all of a fleets tankers, 99% of them might stop safely, but if one is rearended on the Dan Ryan it could cause significant mayhem. I'm sure that precautions will be taken, it's just that the consequences of a lapse are a lot more severe than some hacker text on a web page.

A Day Without Illegal Immigrants

CNN - Dobbs: Radical groups taking control of immigrant movement

Supporters of the boycott have made no secret of their determination to try to shut down schools, businesses and entire cities. Much of Los Angeles' Seventh Street produce market, which supplies thousands of local restaurants and markets, is closed today. Many meat-packing companies like Cargill and Tyson are also closing many of their plants.

"The meat packers are confirming what we know," says University of Maryland economics professor Peter Morici, "and that is that this large group of illegal aliens in the United States is lowering the wage rate of semiskilled workers, people who are high school dropouts or high school graduates with minimal training."

In fact, a meat-packing job paid $19 an hour in 1980, but today that same job pays closer to $9 an hour, according to the Labor Department. That's entirely consistent with what we've been reporting -- that illegal aliens depress wages for U.S. workers by as much as $200 billion a year in addition to placing a tremendous burden on hospitals, schools and other social services.

Well, the good thing about the protests is we have a clear indication of which businesses are using illegal immigrants. Now if the INS was serious about enforcing the law the rest'd be simple.