Diary

MI Morning Update: 11-20-08

712 Days Until Election Day

November 20, 2008

QUOTE OF THE DAY:

" Consumer data shows that people will fly a bankrupt airline and buy a ham from a bankrupt farm, or a sofa from a bankrupt store but they won’t buy a car. There is also the cost of a bankruptcy and the cascading events that surround that plus with the dramatic drop in revenue that comes from not being able to sell your products. It’s a unique situation."
David Cole, Chair of the Center for Automotive Research.

MORNING UPDATE:

MCCOTTER STILL NUMBER 4 IN CAUCUS…MIRS reports that U.S. Rep. Thad MCCOTTER (R-Livonia) has won re-election as chair of the U.S. House Republicans’ Policy Committee, the No. 4 leadership post in a caucus that will be 24 members smaller in the 111th Congress. He was challenged by U.S. Rep. Mike BURGESS (R-Texas).

DINGELL LOSES FIRST BATTLE IN LEADERSHIP FIGHT…MIRS reports U.S. Rep. John DINGELL (D-Dearborn) fell shy in a leadership vote this afternoon for his chairmanship of the Energy and Commerce Committee. U.S. Rep. Henry WAXMAN (D-Calif.) won 25 votes to Dingell’s 22.  This is bad for Michigan…maybe a great opportunity for Republicans as the Dems keep pushing out "practical" Democrats. 

AUTO INDUSTRY FACTS…as Washington discusses the "loan package" to the domestic auto industry, please take a look at this 3 minute video that explains the economic effect the big 3 have on our economy.  Labor and Management have to accept some changes to make this plausible.  Job banks, unrealistic work rules and job classifications and huge "golden" payouts should be a thing of the past under any deal Congress puts together.  Watch this video.

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TODAY’S TOP STORIES

The following stories and more are available at my Articles of Interest online.

GOP voters were apathetic
Turnouts hurt McCain and others

Gary Andres
November 20, 2008

Masterful voter mobilization and turnout operations fueled President-elect Baracka Obama’s successful road to the White House. His team peformed brilliantly in many states — organizing one of the most impressive political operation in modern history. Consider these numbers: the president-elect generated about 66 million votes across the country, almost 10 million more than Sen. John Kerry produced four years ago.

But a closer look at the numbers reveals another pattern. No doubt, massive pro-Obama vote surges flipped states such as Virginia, North Carolina and Florida from Republican in 2004 to Democrat in 2008. But many other states witnessed a different trend – Republican voters staying home. In these areas, GOP apathy – rather than increased Democratic turnout – contributed to Sen. John McCain’s loss and produced some down ticket Republican losses or unexpectedly close races. This presidential campaign was a tale of two electorates, with some states falling into the Obama column due to massive Democratic mobilization and others because of anemic Republican participation. The results, however, were two sides of the same coin called enthusiasm — Mr. Obama produced a surplus of it, while Republicans suffered a deficit.

 

Bet on The Big Three

BY MIKE COX
November 19, 2008

One of the more popular shows on television these days is "Deal or No Deal." So consider this deal: For a loan of $25 billion, you could create an industry that would directly and indirectly create 13 million jobs, one out of every 10 in the country; account for $690 billion of U.S. retail sales, roughly 20% of the nation’s total; provide quality health care to hundreds of thousands of workers; become the leading purchaser of iron, steel, copper and computer chips nationwide; and generate billions of dollars in tax revenue to federal, state and local governments.

Would the loan be worth the reward? This is what Detroit’s Big Three — GM, Ford and Chrysler — are proposing to the federal government: a onetime, $25-billion bridge loan, to be carved out of the already approved $700-billion Treasury Department rescue package. In other words, the deal would involve no new costs to taxpayers. To safeguard the investment, conditions would be placed on the automakers, including guaranteeing the government an equity stake in the companies.

 

Michigan worries automaker meltdown could doom state

Thursday, November 20, 2008 5:35 AM EST

LANSING, Mich. (AP) – A quarter-century ago, Michigan’s monthly unemployment rate hit 17 percent and so many laid-off workers left the state that bumper stickers asked, "Will the last one leaving Michigan please turn out the lights?" Fears of a replay now have residents feeling even gloomier in this hard-hit industrial state where the Detroit Three are headquartered.

Executives with General Motors Corp., Ford Motor Co. and Chrysler LLC have so far been unable to persuade Congress to provide billions of dollars in loans to keep them afloat. Even if they get federal help, domestic automakers likely will shrink further, something Michigan has had to deal with for years.

 

Granholm heading to D.C. to lobby for auto bailout

Mark Hornbeck

Gov. Jennifer Granholm announced Wednesday she’ll cut short her Middle East trade mission to join other governors in Washington on Thursday to lobby congressional leaders for approval of a $25 billion auto company bridge loan. She had been scheduled to return from a trip to Israel and Jordan on Friday, where she was dropping in on 130 companies in an effort to court economic development for Michigan.

Granholm said she’ll call on congressional leaders to say approval of the loans "is critical to the country’s economy, energy independence and national security." Liz Boyd, press secretary to the governor, said Granholm will be "working behind the scenes on behalf of the auto industry and the state of Michigan."

 

Michigan jobless rate soars to 9.3%
Likely to go higher as U.S. economy sours

Brian J. O’Connor
The Detroit News

The coming winter looks bleak and will only get bleaker for the Michigan economy, as the state jobless rate leapt six-tenths of a point last month, hitting its highest level in 16 years. October’s 9.3 percent unemployment rate reported Wednesday is sure to climb into double-digits within months, economists also say, as growing weakness in the U.S. economy combines with the state’s homegrown four-year recession. "Since December, we’re down 75,000 jobs and from a year ago we’re down almost 100,000 jobs," said Dana Johnson, chief economist for Comerica bank. "It’s not the worst 12-month loss but it’s certainly a bad one. We’re just going lower and lower."

And we’re not alone. The nation’s faltering economy sent stock markets reeling again Wednesday, with the Dow Jones index closing below 8,000 for the first time in five years. The Dow gave up 427.47 points, or 5.07 percent, to close at 7,997.28. That came after more dismal economic news, including notes from the last Federal Reserve meeting saying the nation’s financial stewards expect the country will be in a full-blown recession until at least next summer. The last time Michigan’s unemployment rate was this bad was in July 1992, after another national recession, said George Erickcek, senior regional analyst with the W.E. Upjohn Institute for Employment Research in Kalamazoo.

 

Bill would help people get their homes back

Thursday, November 20, 2008 5:12 AM EST
GUEST OPINION – RUTH JOHNSON

The worst of times isn’t bringing out the best in some people. Here in Oakland County, some unscrupulous investors and overwhelmed financial institutions are, in effect, "stealing" the last chance some families have to save their foreclosed homes. The problem is this: Most homeowners who lose their homes to foreclosure have six months – even after the home has been sold at sheriff’s sale – to redeem their home. All they need is the money and the amount they need to pay.

In March 2005, however, well-intentioned state lawmakers changed real estate law to prohibit Michigan’s county registers from calculating the amount of money necessary to redeem a home that has gone through foreclosure – a simple calculation registers had provided for years as a public service. The change in law had unforeseen consequences. It gave the responsibility of calculating the redemption amount to the investor who had purchased the home – the people with a very real financial stake in keeping the newly purchased home.

 

The testing of Obama has begun

James Lyons
Thursday, November 20, 2008

The ink had barely dried on the final vote count when the testing of President-elect Barack Obama began.

One of the first was by Vladimir Putin’s puppet Russian President Dmitry Medvedev declaring that if the United States continued with its plan to deploy 10 ABM interceptor missiles into Poland and a radar in the Czech Republic, then Russia would move short range missiles into Kaliningrad, a Russian enclave on the Baltic, targeting Europe. Russia’s excuse for this threat is that they were forced into it because the U.S. defensive system could be converted to an offensive system, targeting Russia. This is a contrived argument and Mr. Putin knows it is groundless.

What’s more disturbing is that Mr. Putin’s European proxies like the former German defense minister, Peter Struck, currently the parliamentary leader of the Social Democrats, called Mr. Medvedev’s threat understandable and blamed President Bush for provoking Russia. This is incredible since he knows Russia was invited to participate in this very limited defensive shield whose fundamental purpose is to destroy any ballistic missile fired at Europe or the United States from a "rogue state" such as Iran.

 

Justice nominee Holder guided Rich pardon
As Clinton adviser, he bypassed career lawyers

Jerry Seper
Thursday, November 20, 2008

The former prosecutor whom President-elect Barack Obama wants to run the Justice Department bypassed the agency’s career lawyers during one of the most controversial final decisions made by President Clinton in January 2001 – the pardon of billionaire fugitive financier Marc Rich, congressional records show.

Eric H. Holder Jr., then the deputy attorney general, worked with former White House Counsel Jack Quinn to ensure that department officials – particularly federal prosecutors in New York who handled the Rich case – "did not have the opportunity to express an opinion on the Rich pardon before it was granted," the Republican-led House Government Reform Committee concluded in a 467-page report in 2002.

The committee’s evidence included an e-mail in which Mr. Holder told Mr. Quinn to "go straight" to the White House and that the "timing is good" for Mr. Rich’s request for a pardon. Normally, pardon requests are reviewed by career prosecutors before a recommendation is forwarded to the White House.

 

Obama’s Pick of Daschle May Test Conflict-of-Interest Pledge

By DAVID D. KIRKPATRICK

WASHINGTON – President-elect Barack Obama’s selection of former Senator Tom Daschle for secretary of health and human services posed new questions on Wednesday about how broadly the new administration would apply Mr. Obama’s campaign promises to limit potential conflicts of interest among his appointees. At issue is Mr. Daschle’s work since leaving the Senate four years ago as a board member of the Mayo Clinic and a highly paid adviser to health care clients at the law and lobbying firm Alston & Bird. In a detailed list of campaign promises, Mr. Obama pledged that "no political appointees in an Obama administration will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years."

Although Mr. Daschle’s work might not preclude his appointment, it could raise the possibility that the administration could require him to recuse himself from any matter related to either the Mayo Clinic or some of the clients he advised at Alston & Bird – a potentially broad swath of the health secretary’s portfolio. No presidential administration has sought to extend its conflict-of-interest policies to previous employers as Mr. Obama has pledged to do, earning high marks from government ethics groups. Mr. Daschle’s selection reflects a clash, widely predicted by Washington lawyers and lobbyists, between Mr. Obama’s unusually sweeping self-imposed ethics rules and his desire to recruit experienced policy hands.

 

Waxman bid to head energy panel boosted
GOP votes to keep Boehner

S.A. Miller and Tom LoBianco
Thursday, November 20, 2008

Rep. John A. Boehner was re-elected Wednesday to lead House Republicans, and Rep. Henry A. Waxman moved a step closer to ousting fellow Democrat Rep. John D. Dingell from a key committee chairmanship, as the parties penciled in the lineups to face off next year in Barack Obama’s Washington.

Mr. Waxman of California narrowly won an early skirmish in the fight over the House Energy and Commerce Committee, capturing the nomination for the post in a 25-22 vote of the Democratic Steering Committee.

Also Wednesday, Mr. Obama continued to fill out the team at the other end of Pennsylvania Avenue, picking former Senate Democratic leader Tom Daschle of South Dakota as Health and Human Services secretary.