Blogging Blue

More bad economic news was delivered today, as the U.S. Labor Department reported the nation lost 524,000 jobs in December. Those job losses pushed the unemployment rate jumped to 7.2%, the highest since early 1993, and for all of 2008, the economy lost a net total of 2.6 million jobs. The 2.6 million jobs lost in 2008 is the most jobs lost since since 1945, when nearly 2.8 million jobs were lost.

Given these most recent numbers, it’s safe to say president-elect Barack Obama has a tall order ahead of him if he’s going to work with Congress to get the economy back on track.

A week ago today, I blogged about the 5.3% raise state legislators were due to receive this week, and I noted State Rep. Bob Ziegelbauer (D-Manitowoc) had already indicated he planned on giving his raise back. Now sure, Ziegelbauer’s gesture is wholly symbolic, given the fact that he makes over $78,000 a year as the Manitowoc County Executive, but smybolic or not, at least he offered to give his pay raise back.

I also noted State Senator Mary Lazich (R-New Berlin) was not among those who announced they were giving back their 5.3% pay raise. Coincidentally, Sen. Lazich was one of only a few lawmakers who voted against approving labor contracts for thousands of state employees, citing the costs of the raises in those contracts, raises which in many cases totaled 5% over three years.

While there’s still been no word from Sen. Lazich or her office on whether or not she’s going to return her hefty raise, two more state legislators have announced they won’t be accepting their raises:

Sen. Jon Erpenbach (D-Waunakee) and Sen. Dan Kapanke (R-La Crosse) have said they won’t take the pay raise because the state faces a two-year deficit of $5.4 billion. Others could join them in coming weeks.

It remains to be seen if Sen. Lazich will be among those who refuses to take her pay raise, but given her previous opposition to a 5% pay raise for state employees over three years, logic would dictate she’d refuse her own 5.3% raise for this year alone, lest she be labeled a hypocrite.

State lawmakers are due to get a 5.3% pay raise effective January 1, 2009, boosting their yearly salary to 49,943 a year. State Rep. Bob Ziegelbauer (D-Manitowoc) has already said he’s going to give back his pay raise, and shortly after Rep. Ziegelbauer’s announcement, a few other legislators followed suit in announcing they too would give back their pay raises. While Ziegelbauer’s announcement is largely symbolic, given that he also earns roughly $71,000 a year as Manitowoc County Executive, it’s still a sign that some legislators understand that they don’t deserve a raise at a time when Wisconsin’s economy is going through some difficult times.

Not among those who announced they were giving back their 3.5% pay raise was State Senator Mary Lazich (R-New Berlin), who was one of only a few lawmakers who voted against approving labor contracts for thousands of state employees, citing the costs of those contracts (emphasis mine):

At a time when Wisconsin continues to struggle with high rates of taxing and spending, a looming structural deficit of over $1.6 billion, high gas and food prices, and per capita income below the national average, hard-working families in the private sector expect state government to exercise fiscal responsibility.

The state Senate is being asked to approve state contracts that according to data I requested from the Legislative Fiscal Bureau would be greater than the increase required for a QEO (Qualified Economic Offer).

The biennial QEO increase amount would be 7.74 percent. Proposed state employment contract increases over the 2007-09 biennium range from 8.0 percent at the low end to 11.0 percent at the high end.

Many workers across the state struggling to pay their bills and our high taxes can only dream of such increases.

This is an inappropriate time to be offering contract increases beyond the rate of the QEO and beyond the rate of inflation. I voted against the contracts.

First, I’d like to make it clear the contracts that were ultimately approved for most state employees mandated a 5% total raise spread out over three fiscal years. As a state employee, my pay increased 2% last year, and it will increase 1% this year and 2% next year. That’s a 5% pay increase over three years, just a little less than the 5.3% State Senator Lazich will receive this year alone.

So as State Senator Lazich wrote - if she in fact was the author of the blog entry I linked to - “At a time when Wisconsin continues to struggle with high rates of taxing and spending, a looming structural deficit of over $1.6 billion, high gas and food prices, and per capita income below the national average, hard-working families in the private sector expect state government to exercise fiscal responsibility.” As a hardworking taxpayer, I do expect my state government - which includes legislators like State Senator Mary Lazich - to exercise fiscal responsibility, and I expect them to start by showing a little less hypocrisy. If a 5% pay raise for state employees over three years is too rich for Sen. Lazich’s tastes, then surely her own 5.3% raise in one year is too rich as well. I expect to see State Senator Lazich forgo her raise for the upcoming fiscal year, because anything less would be fiscally irresponsible and hypocritical.

This is how bad things have gotten during the current recession:

I don’t see how we can afford to refuse a bailout to Santa. After all, think of all those kids who won’t get their gold-plated Uggs or their 52 inch plasma TV’s!

H/T to Dan Cody, capper, and Nick Schweitzer.

Despite the fact that our economy is in a nosedive and their approval ratings are in the toilet, members of Congress are in line for a nice pay raise. Lawmakers will receive salaries of $169,300, a boost of $4,100 over their current pay.

If you ask me, that’s a pretty nice raise….I wish I could get a raise in my like that during these tough economic times. After all, I work hard during the week, so I deserve a nice raise!

That’s a question that begs to be answered.

I’ll admit I supported the bailouts of Wall Street and the “Big Three” automakers, but now that the first 350 billion dollars of the 700 billion dollar Wall Street bailout has been spent by the government, I think it’s worth asking how all that taxpayer money was spent. The Associated Press thought that was a question worth asking as well. The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions of each bank, and surprisingly - or unsurprisingly, given your level of cynicism - none one of the banks contacted answered the AP’s questions:

The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what’s the plan for the rest?

None of the banks provided specific answers.

Not only did none of the 21 banks contacted answer the AP’s questions, but Kevin Heine, spokesman for Bank of New York Mellon, which received about $3 billion in bailout money, said he wouldn’t share spending specifics before adding, “I just would prefer if you wouldn’t say that we’re not going to discuss those details.”

I’m sure the banks who received taxpayer bailouts would prefer not to have to account for the money they received, presumably because either they didn’t use the funds as they were intended or they simply cannot account for how they used the funds. Either possibility shows the stunning lack of oversight in the TARP program, leaving open the possibility that a portion of the 350 billion dollar bailout was used to line the pockets of the same executives who “led” so many of our nation’s financial institutions into the situations they found themselves in prior to their bailout.

…and I’ve come to the conclusion that if the Big Three don’t get bailed out by the White House and do end up in bankruptcy, resulting in our economy slipping into a full-fledged depression, the GOP will have dug themselves a hole that they’ll spend a generation or more digging themselves out of. After all, they’ll shoulder much of the blame if the Big Three fail and the economy slips into a depression, and I can see Democrats using the refusal of some Republicans to vote in favor of the bailout as fodder for more than a few campaign ads.

Personally, I’d much rather have seen Republican senators vote in favor of a bailout for the Big Three, but from a purely political standpoint, their votes against the bailout will certainly serve a valuable political purpose if our nation ends up in another depression as a result.

I’ve already blogged about the efforts of some Republican senators to kill the proposed auto bailout bill and blame the failure of that bill on the United Auto Workers, and I also warned about the possible domino effect that could result if one or more of the domestic auto manufacturers closed its doors. No sooner had I clicked “publish” and I happened across this headline from Talking Points Memo:

General Motors Temporarily Closing 20 Factories Across North America

According to TPM, GM is temporarily closing 20 factories across North America, while also making broad cuts to its vehicle production:

GM said it will cut 250,000 vehicles from its production schedule for the first quarter of 2009, which includes a cut of 60,000 vehicles announced last week. Normal production would be around 750,000 cars and trucks for the quarter, spokesman Tony Sapienza said.

Many plants will be shut down for the whole month of January, he said, and all told, the factories will be closed for 30 percent of the quarter.

Things are certainly bad, but something tells me they’re going to get worse…

“It’s Herbert Hoover time”

That was the message Vice President Dick Cheney brought to a closed-door Senate GOP lunch Wednesday, December 10th, reportedly warning it would be “Herbert Hoover” time if aid to the struggling U.S. auto industry was rejected.

On Thursday night, Senate Republicans killed the auto bailout bill that had been supported by Democrats and the White House, with Sen. Mitch McConnell of Kentucky blaming the evil boogeyman, organized labor. Sen. McConnell, who coincidentally hails from a state that has a significant presence of foreign auto manufacturers who would no doubt benefit if the domestic auto industry collapsed - blamed the United Auto Workers for failing to give greater concessions regarding workers’ pay and benefits. However, what Sen. McConnell conveniently failed to mention is that workers in many of the non-union foreign auto plants in states like Kentucky, Tennessee, and Texas often earn as much or more than their unionized counterparts working for the domestic auto manufacturers. The issue for Republicans like Sen. McConnell really isn’t workers’ pay - he and his ilk see this as an opportunity to weaken organized labor, a segment of the population that has not traditionally supported the Republican Party.

Despite last night’s setback by Senate Republicans, the White House isn’t giving up on an auto bailout, signaling that it might attempt to use Treasury financial market rescue funds to prop up the auto industry until a new Congress convenes in January:

“Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms,” the administration said in a statement. “However, given the current weakened state of the U.S. economy, we will consider other options if necessary – including use of the TARP program — to prevent a collapse of troubled automakers.”

Hopefully there will be some movement on this issue, because the last thing our economy needs right now is a failed auto industry, which would no doubt result in a chain effect of business closings and layoffs of not just autoworkers, but workers in all those businesses that produce components such as seats, dashboards, etc. A collapse of our nation’s domestic auto industry could very well be the tipping point that moves our economy from a recession to a depression, and that’s the last thing any of us need right now.

Oh, and one more thing…while Sen. McConnell and his Republican colleagues in Washington are blaming the UAW for not making deep enough concessions in workers’ wages and benefits, I’d love to hear Sen. McConnell say he’s willing to take a cut in his pay and benefits until the economy picks up, lest he run the risk of being labeled a hypocrite for demanding hardworking folks take cuts in their pay and benefits while he gets a six figure salary and the Cadillac of health insurance plans.

For as bad as Wisconsin’s 5.4 billion dollar budget deficit is, things could be worse, as evidenced by California’s massive budget deficit:

The state faces a $28 billion budget shortfall over the next two years. If nothing is done, nearly $5 billion in public-works projects could be halted in little more than a week for lack of bond sales – everything from bridge replacements to a new highway tunnel and billions of dollars’ worth of school construction, according to state Treasurer Bill Lockyer.

Now a 28 billion dollar budget shortfall is bad, but the news gets worse:

The picture worsens next spring if legislators don’t pass some plan to increase revenues or cut spending or both. California will run out of operating cash in March, state controller John Chiang told the lawmakers. The recession has severely squeezed state tax revenues.

Lawmakers in California and Wisconsin have blamed the economic downturn for worsening the budget deficits in both states, but I’m just glad I don’t live in California, considering the fact that there’s been no talk of Wisconsin running out of operating cash at any point in the near future.