Anger toward UAW erupts at California auto workers meeting

Tom Eley
Anger among workers at the New United Motor Manufacturing Inc. (NUMMI) plant in Fremont, California, toward the United Auto Workers (UAW) exploded at a January 24 meeting discussing the imminent closure of the facility. Nearly 5,000 workers will lose their jobs when the plant, formerly a joint venture of General Motors and Toyota, closes on March 31. Four hundred or so workers were present at the meeting

Several attendees captured the eruption on video, which began during comments by UAW Local 2244 Bargaining Chairman Javier Contreras. Contreras was booed, jeered, and interrupted as he attempted to present details of the severance package. At one point an outraged older worker demanded to know “where the hell” the union official had been for the last six months. Contreras burst out, “Shut the f— up, you motherf——!” At that point, furious workers rushed to the front of the room. Contreras and other local UAW personnel were defended by a few union officials. Local union leaders pleaded for calm and called in the police in a bid to control the workers.

Workers present say that the yelling began because union officials would not allow them to speak. Workers are angry that they have been kept in the dark over UAW negotiations with NUMMI.

The video footage reveals that the UAW, on the one hand, and rank-and-file auto workers, on the other, make up two mutually hostile camps. The workers bristle with mistrust and contempt for the union; the UAW officials are defensive and thuglike. The episode exposes the UAW’s role in executing the layoff and wage cut dictates of business—as well as their unmistakable contempt for the workers they nominally represent.

General Motors ended its participation in NUMMI in June 2009 as part of its forced bankruptcy at the hands of the Obama administration. Toyota then announced it would no longer continue operations there as of March 2010, blaming GM’s unilateral withdrawal from the partnership.

The UAW, which played a critical role in the bankruptcy process for GM and Chrysler by imposing plant closures and wage and benefit cuts while stifling worker opposition, has fallen back on its usual stock-in-trade of chauvinism and jingoism. It has singled out Toyota for attack, recently organizing a nationalist rally in Washington, D.C., outside the Japanese consulate that was attended by a handful of officials and their hangers-on.

Many workers at NUMMI have emphatically rejected the anti-Japanese rhetoric. Speaking of the explosive meeting, a long-time auto worker, Ken Villegas, told the San Francisco Chronicle that “the general tenor of the rank-and-file complaints were that union leaders should go after GM, as well as Toyota,” along with complaints over secretive severance negotiations.

Another Chronicle report confirms that the anger at the union meeting stemmed in part from the one-sided attack on Toyota. “Rank-and-file members harangued leaders that day for conducting a campaign against Toyota over the impending closure while not going after General Motors,” it wrote.

A NUMMI worker, when asked by a reporter with the left publication Monthly Review about the UAW protest outside the Japanese consulate in Washington, expressed outrage. “That was these guys,” he said of the local union officials. “I don’t know what the hell that is! Why blame Toyota? One of the reasons they don’t blame GM—I don’t know what the percentage is—but they own a portion of GM. Are you going to shoot yourself in the foot? No, they’re not going to do that. The problem is the membership doesn’t have a voice.”

Another worker denounced the UAW and the Obama along similar lines. “If Toyota owes us doesn’t that mean General Motors owes us too?” he asked. “And does the fact that [UAW President Ron] Gettelfinger sold us out for 17.5 percent of General Motors stock have anything to do with violating our charter and the severe conflict of interest? How can you trust your representatives? They’ve got to look at both ledgers. They’ve got to make sure those 17.5 percent of shares grow—and at whose expense?”

“We know they’re going on trips to Palm Springs,” another worker said of the UAW officials. “There was a photograph circulating in the plant of them laying on lawn chairs and drinking margaritas.”

The UAW is trying to handcuff workers until the plant is shut down, while it seeks to secure more perks for union officials from Toyota. It is pushing a severance package that would bar workers from taking action in the plant’s last two months, a proposal that “would link workers’ departure payouts to the continued, smooth operation of the factory through its closing,” according to the Chronicle. Workers are also outraged that the UAW is demanding a share of whatever severance pay they receive.

Negotiations with NUMMI have been strung out by the UAW demand that the maximum severance package be increased to more than $60,000. This would benefit only a handful of workers and, of course, union officers. Union executives are also demanding a $72 million contribution from NUMMI to a health insurance program controlled by the UAW. “Most of the people working at the plant won’t even be eligible for it,” one worker told a reporter. “It’s mainly for the UAW as a whole rather than for the local.”

Local 2244 president Sergio Santos declared that if NUMMI does not meet the bureaucracy’s demands for cash, it “would be a slap in the face to American workers.”

The UAW has in fact done nothing to keep the plant open. In interviews, workers derided a local UAW petition drive, noting that while it was being circulated, machinery was being removed from the plant.

The NUMMI closure will lead directly to 1,400 more layoffs in the local parts industry, and indirectly to thousands more. This is in California, where the unemployment rate is already at 12.4 percent and where vital social services have been scaled back due to the worst of the nation’s state budget crises.

NUMMI’s suppliers have in recent days announced their own major layoffs. Johnson Controls has said it will close its Livermore plant, resulting in 321 layoffs, with 240 of these coming in late March, timed to coincide with the closure of NUMMI. In addition to the 4,700 jobs lost at NUMMI, Fremont will see an additional 314 parts and supply jobs vanish. The city of Hayward will lose 387 jobs after the closure of Injex Industries. Modesto will lose 186 jobs with the shutdown of Trim Master, Inc. Stockton will suffer 154 job losses after Kyoho Manufacturing closes, and Merced will lose 53 jobs after Arvin Sango shuts its doors.

Here's Why The Real Jobs Loss Number Was 5x Worse Than What The BLS Reported

businessinsider.com

TrimTabs employment analysis, which uses real-time daily income tax deposits from all U.S. taxpayers to compute employment growth, estimated that the U.S. economy shed 104,000 jobs in January. Meanwhile, the Bureau of Labor Statistics (BLS) reported the U.S. economy lost 20,000 jobs. We believe the BLS has underestimated January’s results due to problems inherent in their survey techniques.

In addition to their regular report, the BLS published benchmark revisions to their employment estimates derived from an actual payroll count for March 2009. As a result, job losses from April 2008 through March 2009 were revised up a whopping 930,000, or 23% from their earlier revisions. In addition, the BLS revised their job loss estimates for 2009 up 617,000, or 14.8%.

While the BLS originally reported job losses of 4.2 million in 2009, TrimTabs reported 5.3 million, a difference of more than a million lost jobs. We consistently reported that based on real-time tax data, job losses were much higher than the BLS was reporting. This past January, the BLS revised their job loss estimate to 4.8 million, an increase of almost 600,000 lost jobs. The new total brought the BLS’ revised estimates much closer to TrimTabs’ original estimate based on real-time tax data.

Since July 2009, TrimTabs estimates and the BLS estimates have diverged again. While the tax data points to a weak job market, the BLS estimates point to a steadily improving job market. We believe the job market is much worse than the BLS is reporting and that in January 2011, when the BLS revises their estimates for 2010, their April 2009 through December 2009 results will move much closer to TrimTabs’ results.

The BLS has seriously underreported job losses for the past two years due to their flawed methodology. TrimTabs has identified the following four problems:

1. The BLS employment estimate is based on a survey, and not on an actual count of employees. While the BLS survey is large and supposedly designed to capture the complex nature of the employment market, it is still a survey and therefore subject to error. TrimTabs believes that rapid changes in an employment cycle cannot be captured by surveys.

2. Several times a year, the BLS applies enormous seasonal adjustments to their survey results to account for seasonal fluctuations in the job market. For example, this January, the BLS added 1.92 million jobs to their survey results to report a job loss of 20,000 to account for the layoff of retail holiday workers. In our opinion, the sheer magnitude of the seasonal adjustment which dwarfs the monthly result renders this month’s job loss estimate meaningless.

3. At the time of the first release, only 40% to 60% of the BLS survey is complete and is subject to large revisions over the next two months.

4. The BLS applies a mysterious “birth/death” adjustment to their survey results to account for business openings and closings. While the payroll data was adjusted substantially, the “birth/death” adjustments were left unchanged. In 2008 and 2009, the BLS’ “birth/death” adjustment added 904,000 and 882,000 jobs, respectively, for a total of 1.79 million. By way of comparison, in 2006 and 2007, the BLS’ “birth/death” adjustment added 964,000 and 1.13 million jobs, respectively. We find it highly unlikely that in 2008 and 2009, during the worst recession since the 1930’s, more businesses opened than closed netting 1.79 million jobs.

In our opinion, flawed BLS survey results, month-after-month, do the public a huge disservice. While its results point to a slowly recovering economy, TrimTabs’ results point to a dangerously weak economy.

A comparison of TrimTabs’ employment results versus the BLS’ results from January 2008 through January 2010 is summarized below.

Source: TrimTabs Investment Research – www.trimtabs.com and Bureau of Labor Statistics – www.bls.com

Several other employment related statistics support Trimtabs’ conclusion that the labor market is weaker than what the BLS is reporting:

· Real-Time tax withholding data shows that wages and salaries declined an adjusted 1.0% y-o-y. In January 2009, wages and salaries declined 5.0%. If the labor market were improving, we would expect a positive year-over-year growth rate. The fact that tax withholding data is still declining year-over-year suggests that the labor market is still contracting.

· The Monster Employment Index declined further in January, falling 0.9%.

· The TrimTabs Online Jobs Index reported slightly higher job availability in January but remains at a low level.

· Advanced Data Processing reported a job loss of 22,000.

· Weekly unemployment claims edged up in the past month, rising 10.2% since the beginning of January.

· In January, a whopping 11.5 million people were collecting some form of unemployment insurance, up 27.8%, from 9.0 million in November.

The continuing theater of BLS absurdities

Mish
In the continuing theater of BLS absurdities, the unemployment rate fell to 9.7% in spite of a 25th consecutive month of job losses. Some stopped counting at 22 months in November. However, I find November questionable.

This month professional services contributed 44,00 jobs to the plus side, but 52,000 of them were part-time jobs. Amazingly a table below shows the number of part-time workers decreased by 849,000 from last month. Go figure.

Moreover, the so-called 64,000 rise in November can be attributed to the seasonally adjusted hiring of 94,000 temporary workers. Here is a look at revisions ....

BLS Revisions



Household Revisions

The above table does not affect the unemployment rate. Revisions to the Household Survey do. Here are the household revisions.



Bingo. Just like that the population shrank as did the civilian labor force.

For some reason the BLS does this in pieces. The following chart shows the result.



There are now a whopping 2.5 million people without a job but want one, yet are not counted as unemployed.

So yes, the "official unemployment rate" can hold its own or even drop with this kind of nonsense.

Now for a closer look at the report ....

This morning, the Bureau of Labor Statistics (BLS) released the January 2010 Employment Report.

The unemployment rate fell from 10.0 to 9.7 percent in January, and nonfarm payroll employment was essentially unchanged (-20,000), the U.S. Bureau of Labor Statistics reported today. Employment fell in construction and in transportation and warehousing, while temporary help services and retail trade added jobs..




Establishment Data



click on chart for sharper image

Highlights

• 20,000 jobs were lost in total vs. 150,000 jobs last month.
• 75,000 construction jobs were lost vs. 32,000 last month.
• 11,000 manufacturing jobs were added vs. 23,000 lost last month.
• 48,000 service providing jobs were added vs. 69,000 lost last month.
• 42,000 retail trade jobs were added vs. 18,000 lost last month.
• 44,000 professional and business services jobs were added vs. 20,000 last month.
• 16,000 education and health services jobs were added vs. 26,000 last month.
• 14,000 leisure and hospitality jobs were lost vs. 41,000 last month.
• 8,000 government jobs were lost vs. 27,000 last month.
• 52,000 temporary help jobs were added vs 58,000 last month and a whopping 94,000 in November.
  

Look at that last line again.

November added 94,000 temporary jobs seasonally adjusted. Even if true it is hardly anything to crow about but it does explain the positive job growth in November.

A total of 60,000 goods producing jobs were lost (higher paying jobs). Professional services contributed 44,00 jobs to the plus side, but 52,000 of them were part-time jobs! Amazingly a table below shows the number of part-time workers decreased by 849,000 from last month.

Note: some of the above categories overlap as shown in the preceding chart, so do not attempt to total them up.

Index of Aggregate Weekly Hours

Work hours were up one tick to 33.3. Short work weeks contribute to household problems. Moreover, before hiring begins at many places, work weeks will increase.

Birth Death Model Revisions 2009



click on chart for sharper image

Birth Death Model Revisions 2009



click on chart for sharper image

Birth/Death Model Revisions

There are so many revisions and the BLS Birth/Death Model methodology so screwed up it is pointless to further comment other than to repeat a few general statements.

Please note that one cannot subtract or add birth death revisions to the reported totals and get a meaningful answer. One set of numbers is seasonally adjusted the other is not. In the black box the BLS combines the two coming out with a total. The Birth Death numbers influence the overall totals but the math is not as simple as it appears and the effect is nowhere near as big as it might logically appear at first glance.

BLS Black Box

For those unfamiliar with the birth/death model, monthly jobs adjustments are made by the BLS based on economic assumptions about the birth and death of businesses (not individuals). Those assumptions are made according to estimates of where the BLS thinks we are in the economic cycle.

The BLS has admitted however, that their model will be wrong at economic turning points. And there is no doubt we are long past an economic turning point.

Here is the pertinent snip from the BLS on Birth/Death Methodology.

• The net birth/death model component figures are unique to each month and exhibit a seasonal pattern that can result in negative adjustments in some months. These models do not attempt to correct for any other potential error sources in the CES estimates such as sampling error or design limitations.
• Note that the net birth/death figures are not seasonally adjusted, and are applied to not seasonally adjusted monthly employment links to determine the final estimate.
• The most significant potential drawback to this or any model-based approach is that time series modeling assumes a predictable continuation of historical patterns and relationships and therefore is likely to have some difficulty producing reliable estimates at economic turning points or during periods when there are sudden changes in trend.

Household Data

In January, the number of unemployed persons decreased to 14.8 million, and the unemployment rate fell by 0.3 percentage point to 9.7 percent.

The number of long-term unemployed (those jobless for 27 weeks and over) continued to trend up in January, reaching 6.3 million. Since the start of the recession in December 2007, the number of longterm unemployed has risen by 5.0 million.

In January, the civilian labor force participation rate was little changed at 64.7 percent. The employment-population ratio rose from 58.2 to 58.4 percent.

The number of persons who worked part time for economic reasons (sometimes referred to as involuntary part-time workers) fell from 9.2 to 8.3 million in January. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

Persons Not in the Labor Force

About 2.5 million persons were marginally attached to the labor force in January, an increase of 409,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 1.1 million discouraged workers in January, up from 734,000 a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.5 million people marginally attached to the labor force had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

Table A-8 Part Time Status

Note: many table numbers have changed. Last month and for as long as I remember, this used to be Table A-5.



click on chart for sharper image

The chart shows there are 8.3 million people are working part time but want a full time job. A year ago the number was 8.8 million. More importantly, last month it was 9.2 million. Specifically, 849,000 part-time workers now have full-time status (or lost their job altogether).

In general a decreasing number of part-time workers is a good thing. It remains to be seen if this is an outlier or the start of a trend.

Regardless, there are still millions of workers whose hours will rise before companies start hiring more workers.

Table A-15

Table A-15 is where one can find a better approximation of what the unemployment rate really is. Note: many table numbers have changed. Last month and for as long as I remember, this used to be Table A-12.



click on chart for sharper image

Grim Statistics

The official unemployment rate is 9.7%. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

It reflects how unemployment feels to the average Joe on the street. U-6 is 16.5%. Both U-6 and U-3 (the so called "official" unemployment number) are poised to rise further although most likely at a slower pace than earlier this year.

Looking ahead, there is no driver for jobs and states in forced cutback mode are making matters far worse.

Breakdown in the Gold Market

Jim Willie
A great disconnect exists in the gold market between the exchange futures contract price (the paper price) and the gold bullion paid price for transactions (the physical price). The differential in price is growing wider, enough to place tremendous pressure on the gold market itself. Look not to the gold premium paid for purchases, but to high volume purchases in the tens of million$. In mid-December, almost every demand for gold contract delivery was matched by a cash delivery, complete with 25% bonus premium offered. The officials even produced a new ledger item called 'Cash For Delivery' that was necessary to balance their badgered books. It prompted little attention. Some call it a basic bribe. Others call it a technical default.

Fast approaching is the event of GAME OVER for London, a condition that has already reached critical level, according to a key reliable source of information with London connections and direct experience with its market events. How long can a major metals exchange sell contracts but have miniscule supply of gold in their vaulted possession? The paper gold market and the physical gold bullion market have finally separated in a practical manner, meaning actual gold has almost no role anymore in London paper contract settlement. The absence of gold in London requires extraordinary tactics to settle contracts and to obtain gold bullion. Red tape procedures delay delivery for individuals, and bribes accompany gold delivery demands as standard practice. The London Bullion Market Assn has almost zero gold, its supply having been drained in high volumes since early December, a process currently in acceleration. The opportunity to convert fiat money into precious metal at prices considered reasonable is also vanishing. The London gold banker said,

"There is going on a lot more than meets the eye. The physical system is actually consolidating bigtime and is organizing itself with lightning speed, totally hidden from pretty much anyone, even the so-called insiders. The paper precious metal market and the physical precious metal market have defacto disconnected. The paper and physical gold markets currently operate in parallel universes. The outflow of physical metal from bank vaults is happening at a mind bending pace."

Notice the reference to consolidation and re-organization in a manner not apparent to those fixated on the existing cockamamy corrupted system that is permitted by loyalist regulators. The officials in the LBMA, COMEX, USDept Treasury, and elsewhere are struggling to maintain the current system, and reportedly are not in step with awareness of the newly devised structures coming into place. In the background, far from view, new systems are being fabricated from scratch. Some involve complex barter systems soon to emerge and hit the scene with a splash, with impressive vertical integration. At the same time, new currencies for usage are still undergoing planning, foundation setup, contract latticework, and more for actual implementation.

The true gold price might very soon become unknown, an extremely positive development. Telltale events such as bankruptcy, lawsuits, and arrests are likely to come, all in time, since the breakdown in order has led to extraordinary reactions. Right now, we see extremely strong tactics using naked gold short contracts at the London metals exchange (LBMA) and the COMEX in the United States to drive down the gold price. It is all illegal and permitted. Margin calls have hit, forcing further selling of paper contracts. Gold investor sentiment among the naive and less informed has been dragging, ever since early December.

The world is approaching a climax event. Sure, many analysts have made such a claim for months. But with Europe in flux, the USCongress in flux, the Persian Gulf in flux, the US-China trade battles escalating, and USTreasury debt finance recognized more and more as monetized printing press activity, we are truly approaching a climax event as gold metal has exited the London market. The trigger event is unknown. It will likely not be directly related to the above event fronts. It will probably be a typical garden variety event pertaining to the far from ordinary stresses tied to the ongoing crisis in the credit market, gold market, and currency market.

The financial press is critically important precisely now, for not spilling the facts on the current gold market breakdown and divergence. Much of the pressures are hidden though, since the financial press networks report only the official paper-based prices. Do not expect to read in Reuters or Bloomberg or the Associated Press or Wall Street Journal or the New York Times or Investors Business Daily or Barrons that a grotesque gold shortage exists in the London metals exchange or at the COMEX in New York and Chicago. They will not report that London is virtually drained of gold, yet still sells gold contracts. Accurate news reporting would accelerate the breakdown and remove the possibility for time extension. The press will not report that billionaires are emptying their gold bullion accounts at rapidfire pace, out of gross distrust of the bankers, since gold leasing has illegally been standard practice for many years. Imagine selling lumber contracts without wood delivered. Imagine selling mortgages without home titles delivered. Actually, Wall Street did precisely that from 2003 to 2007. More...

Space storm alert: 90 seconds from catastrophe

New Science

Video: When plasma is flung at Earth

Related editorial: We must heed the threat of solar storms

IT IS midnight on 22 September 2012 and the skies above Manhattan are filled with a flickering curtain of colourful light. Few New Yorkers have seen the aurora this far south but their fascination is short-lived. Within a few seconds, electric bulbs dim and flicker, then become unusually bright for a fleeting moment. Then all the lights in the state go out. Within 90 seconds, the entire eastern half of the US is without power.

A year later and millions of Americans are dead and the nation's infrastructure lies in tatters. The World Bank declares America a developing nation. Europe, Scandinavia, China and Japan are also struggling to recover from the same fateful event - a violent storm, 150 million kilometres away on the surface of the sun.

It sounds ridiculous. Surely the sun couldn't create so profound a disaster on Earth. Yet an extraordinary report funded by NASA and issued by the US National Academy of Sciences (NAS) in January this year claims it could do just that.

Over the last few decades, western civilisations have busily sown the seeds of their own destruction. Our modern way of life, with its reliance on technology, has unwittingly exposed us to an extraordinary danger: plasma balls spewed from the surface of the sun could wipe out our power grids, with catastrophic consequences.

The projections of just how catastrophic make chilling reading. "We're moving closer and closer to the edge of a possible disaster," says Daniel Baker, a space weather expert based at the University of Colorado in Boulder, and chair of the NAS committee responsible for the report.

It is hard to conceive of the sun wiping out a large amount of our hard-earned progress. Nevertheless, it is possible. The surface of the sun is a roiling mass of plasma - charged high-energy particles - some of which escape the surface and travel through space as the solar wind. From time to time, that wind carries a billion-tonne glob of plasma, a fireball known as a coronal mass ejection (see "When hell comes to Earth"). If one should hit the Earth's magnetic shield, the result could be truly devastating.

The incursion of the plasma into our atmosphere causes rapid changes in the configuration of Earth's magnetic field which, in turn, induce currents in the long wires of the power grids. The grids were not built to handle this sort of direct current electricity. The greatest danger is at the step-up and step-down transformers used to convert power from its transport voltage to domestically useful voltage. The increased DC current creates strong magnetic fields that saturate a transformer's magnetic core. The result is runaway current in the transformer's copper wiring, which rapidly heats up and melts. This is exactly what happened in the Canadian province of Quebec in March 1989, and six million people spent 9 hours without electricity. But things could get much, much worse than that.

Worse than Katrina

The most serious space weather event in history happened in 1859. It is known as the Carrington event, after the British amateur astronomer Richard Carrington, who was the first to note its cause: "two patches of intensely bright and white light" emanating from a large group of sunspots. The Carrington event comprised eight days of severe space weather.

There were eyewitness accounts of stunning auroras, even at equatorial latitudes. The world's telegraph networks experienced severe disruptions, and Victorian magnetometers were driven off the scale.

Though a solar outburst could conceivably be more powerful, "we haven't found an example of anything worse than a Carrington event", says James Green, head of NASA's planetary division and an expert on the events of 1859. "From a scientific perspective, that would be the one that we'd want to survive." However, the prognosis from the NAS analysis is that, thanks to our technological prowess, many of us may not.

There are two problems to face. The first is the modern electricity grid, which is designed to operate at ever higher voltages over ever larger areas. Though this provides a more efficient way to run the electricity networks, minimising power losses and wastage through overproduction, it has made them much more vulnerable to space weather. The high-power grids act as particularly efficient antennas, channelling enormous direct currents into the power transformers.

The second problem is the grid's interdependence with the systems that support our lives: water and sewage treatment, supermarket delivery infrastructures, power station controls, financial markets and many others all rely on electricity. Put the two together, and it is clear that a repeat of the Carrington event could produce a catastrophe the likes of which the world has never seen. "It's just the opposite of how we usually think of natural disasters," says John Kappenman, a power industry analyst with the Metatech Corporation of Goleta, California, and an advisor to the NAS committee that produced the report. "Usually the less developed regions of the world are most vulnerable, not the highly sophisticated technological regions."

According to the NAS report, a severe space weather event in the US could induce ground currents that would knock out 300 key transformers within about 90 seconds, cutting off the power for more than 130 million people (see map). From that moment, the clock is ticking for America.

First to go - immediately for some people - is drinkable water. Anyone living in a high-rise apartment, where water has to be pumped to reach them, would be cut off straight away. For the rest, drinking water will still come through the taps for maybe half a day. With no electricity to pump water from reservoirs, there is no more after that.

There is simply no electrically powered transport: no trains, underground or overground. Our just-in-time culture for delivery networks may represent the pinnacle of efficiency, but it means that supermarket shelves would empty very quickly - delivery trucks could only keep running until their tanks ran out of fuel, and there is no electricity to pump any more from the underground tanks at filling stations.

Back-up generators would run at pivotal sites - but only until their fuel ran out. For hospitals, that would mean about 72 hours of running a bare-bones, essential care only, service. After that, no more modern healthcare. More...

Govt Lied - Revised Job Report Show Nearly 1Million More Jobs Losses Than Reported

Bloomberg
The U.S. may lose 824,000 jobs when the government releases its annual revision to employment data on Feb. 5, showing the labor market was in worse shape during the recession than known at the time. Click here for a Bloomberg Multimedia interactive visual analysis of the economy’s job losses.

Originally the Labor Department said the economy shed 4.8 million jobs, with most of those losses coming after September 2008. This weeks looming revision shows instead that 5.6 million jobs were eliminated in that time. It also lays bare a fundamental problem the government has when it tallies up the monthly job numbers.

[The fundamental problem is called LYING].

CNBC Ratings Get Smashed

Damien Hoffman

I think Nielson ratings are complete bullshit, but for what it’s worth I’m going to make a bullshit to bullshit comparison:

Once again, CNBC has continued to lose viewers after failing to help anyone save money during the Great Crash of 2008. The newest Nielson Media Research numbers show Business Day (5am-7pm) down 24% P2+ (total households) and down 37% in the A25-54 demographic. Primetime, CNBC is down 34% P2+ and down 25% in the A25-54 demo (Monday through Friday).

That’s a significant drop. Is it those pesky video games? Maybe it’s iPhone apps. Nah. It’s definitely correlated to the value CNBC offers to our investment accounts.

Study: Hunger in America jumps ‘unprecedented’ 46 percent

Daniel Tencer
70 percent of emergency food centers face threats to their survival

If there is any indicator of the toll that the Great Recession has taken on the public, it would be the statistics beginning to emerge about hunger in the US.

According to a study from the nation's largest food bank operator, the number of Americans in need of food aid has jumped 46 percent in three years, including a 50 percent jump in the number of children needing food assistance, and a 64 percent increase in hunger in senior citizens' homes.

The study, Hunger in America 2010, found that 37 million people, or roughly one in eight US residents, received food aid in 2009. That's a 46 percent jump from a similar survey carried out in 2006.

"Clearly, the economic recession, resulting in dramatically increasing unemployment nationwide, has driven unprecedented, sharp increases in the need for emergency food assistance and enrollment in federal nutrition programs," said Vicki Escarra, president and CEO of Feeding America, which operates some 200 food banks across the country.

The study found a growing number of people having to make difficult choices about what to spend their dwindling dollars on, with the rising cost of health care a major contributing factor to hunger.

"More than 46 percent of clients served report having to choose between paying for utilities or heating fuel and food; 39 percent said they had to choose between paying for rent or a mortgage and food; 34 percent report having to choose between paying for medical bills and food; and 35 percent must choose between transportation and food," the study reports.

"It is morally reprehensible that we live in the wealthiest nation in the world where one in six people are struggling to make choices between food and other basic necessities," Escarra said in a statement.

She added that "[t]hese are choices that no one should have to make, but particularly households with children. Insufficient nutrition has adverse effects on the physical, behavioral and mental health, and academic performance of children."

Feeding America's study is just the latest to show an alarming trend line for hunger in the United States.

Last week, a report (PDF) from the Food Research and Action Center found that nearly one in five in the US -- 18.5 percent -- report having gone hungry in the past year, up from 16.3 percent at the start of 2008. Households with children were even likelier to experience hunger, with nearly a quarter reporting hunger in the past year.

Perhaps worst of all, the Feeding America study finds that 70 percent of emergency food centers are reporting "one or more problems that threaten their ability to continue operating."

"While we have reached many more people over the past four years, the need of hungry Americans far outpaces our current level of service," Escarra said.

Obama Seeks Increased Taxes on Middle Class

Reuters
Backdoor taxes to hit middle class
The Obama administration's plan to cut more than $1 trillion from the deficit over the next decade relies heavily on so-called backdoor tax increases that will result in a bigger tax bill for middle-class families.

In the 2010 budget tabled by President Barack Obama on Monday, the White House wants to let billions of dollars in tax breaks expire by the end of the year -- effectively a tax hike by stealth.

While the administration is focusing its proposal on eliminating tax breaks for individuals who earn $250,000 a year or more, middle-class families will face a slew of these backdoor increases.

The targeted tax provisions were enacted under the Bush administration's Economic Growth and Tax Relief Reconciliation Act of 2001. Among other things, the law lowered individual tax rates, slashed taxes on capital gains and dividends, and steadily scaled back the estate tax to zero in 2010.

If the provisions are allowed to expire on December 31, the top-tier personal income tax rate will rise to 39.6 percent from 35 percent. But lower-income families will pay more as well: the 25 percent tax bracket will revert back to 28 percent; the 28 percent bracket will increase to 31 percent; and the 33 percent bracket will increase to 36 percent. The special 10 percent bracket is eliminated.

Investors will pay more on their earnings next year as well, with the tax on dividends jumping to 39.6 percent from 15 percent and the capital-gains tax increasing to 20 percent from 15 percent. The estate tax is eliminated this year, but it will return in 2011 -- though there has been talk about reinstating the death tax sooner.

Millions of middle-class households already may be facing higher taxes in 2010 because Congress has failed to extend tax breaks that expired on January 1, most notably a "patch" that limited the impact of the alternative minimum tax. The AMT, initially designed to prevent the very rich from avoiding income taxes, was never indexed for inflation. Now the tax is affecting millions of middle-income households, but lawmakers have been reluctant to repeal it because it has become a key source of revenue.

Without annual legislation to renew the patch this year, the AMT could affect an estimated 25 million taxpayers with incomes as low as $33,750 (or $45,000 for joint filers). Even if the patch is extended to last year's levels, the tax will hit American families that can hardly be considered wealthy -- the AMT exemption for 2009 was $46,700 for singles and $70,950 for married couples filing jointly.

Middle-class families also will find fewer tax breaks available to them in 2010 if other popular tax provisions are allowed to expire. Among them:

* Taxpayers who itemize will lose the option to deduct state sales-tax payments instead of state and local income taxes;

* The $250 teacher tax credit for classroom supplies;

* The tax deduction for up to $4,000 of college tuition and expenses;

* Individuals who don't itemize will no longer be able to increase their standard deduction by up to $1,000 for property taxes paid;

* The first $2,400 of unemployment benefits are taxable, in 2009 that amount was tax-free.

A Majority Of States Are Now Insolvent: Quantifying The Disastrous Unemployment Situation

Zero Hedge

Zero Hedge recently highlighted the ever increasing Federal outlays on unemployment insurance, leading to questions on whether the true unemployment rate, as indicated by actual cash outlays, may be materially higher than indicated in increasingly dubious governmental reports. One proposed alternative has been that the Federal government is directly subsidizing standalone states' depleted unemployment insurance trust funds. Using data provided by ProPublica we have been able to confirm that indeed standalone states are for the most part now bankrupt and have no reserves left in their coffers when it comes to funding ever increasing insurance benefits. As ProPublica indicates, there are now 26 states which have depleted their trust funds, among these are the usual suspects including California, Michigan, New York, Pennsylvania and Ohio, which now rely exclusively on borrowings from the Federal government to prevent the cessation of insurance payments to recently unemployed workers. Currently all states collectively posses $10.7 billion in trust fund assets(with the bulk held by less impacted states such as Washington ($2.6 billion), Louisiana ($1.1 billion) and Oregon ($1.1 billion). On the other hand, 26 states currently rely exclusively on the Federal Government, and have borrowed a combined $30 billion through December to fund payments. ProPublica estimates that another 8 states will be insolvent within 6 months, as their trust funds also approach 0.

The chart below demonstrates the amount of borrowing per state, as well as trust fund holdings.

Another way of visualizing the damage can be seen on the following chart which highlights

The most bankrupt states are California, with $6.8 billion in borrowings, Michigan ($3.4 billion), New York ($2.4 billion), Pennsylvania ($2.2 billion) and Ohio ($1.9 billion).

A chart demonstrating the collapse in California's trust fund, coupled with the relentless increase in the state's unemployment rate, together with Benefits paid out and actual Revenue gained (if any). Note that the April/May tax revenue collection spike, unlike in prior periods, did nothing to boost the trust fund in 2009.

So what is happening on the Federal side of the ledger? Recall that in December the government spent $14.65 billion in Unemployment Insurance Benefits, which was a 24% jump from the $11.8 billion in November. How is January shaping up? Through January 28th, the Federal Government had spent a total of $13.85 billion for this outlay. Once we get the Friday additional data, we will update our previous chart" we expect the final number to be about $14.1 billion, roughly in line with the December total.

At this point there is no question that the vast majority of the hardest hit states now subsist exclusively due to the generosity of the Federal Government, which in turn, courtesy of a 50%+ indirect take down of each and every Treasury auction (now that QE is over), is at the full mercy of foreign investors, yet as we pointed out, their custody holdings at the Fed have started declining. If the government is unable to finance its profligate ways, and today's budget announcement by Obama is just the icing on the cake, look for states to gradually reign in unemployment checks whether they like it or not, which would likely lead to some very interesting demonstrations of the broader population's lack of solidarity with Mr. Blankfein's $100 million, or whatever it may end up being, bonus number. Our advice to California readers who believe they are owed a refund: file your taxes ASAP - the market for IOUs still has to be properly securitized by JP Morgan.

House Speaker Pelosi Military Travel Cost the United States Air Force $2,100,744.59 over a Two-Year Period

judicialwatch.org

House Speaker’s Military Travel Cost the United States Air Force $2,100,744.59 over a Two-Year Period, Including $101,429 for In-Flight Expenses

Contact Information:
Press Office 202-646-5172, ext 305
Washington, DC -- January 28, 2010

Judicial Watch, the public interest group that investigates and prosecutes government corruption, announced today that it has obtained documents from the Air Force detailing House Speaker Nancy Pelosi’s use of United States Air Force aircraft for Congressional Delegations (CODELs). According to the documents, obtained by Judicial Watch through the Freedom of Information Act (FOIA), the Speaker’s military travel cost the United States Air Force $2,100,744.59 over a two-year period — $101,429.14 of which was for in-flight expenses, including food and alcohol. The following are highlights from the recent release of about 2,000 documents:

• Speaker Pelosi used Air Force aircraft to travel back to her district at an average cost of $28,210.51 per flight. The average cost of an international CODEL is $228,563.33. Of the 103 Pelosi-led congressional delegations (CODEL), 31 trips included members of the House Speaker’s family.
• One CODEL traveling from Washington, DC, through Tel Aviv, Israel to Baghdad, Iraq May 15-20, 2008, “to discuss matters of mutual concern with government leaders” included members of Congress and their spouses and cost $17,931 per hour in aircraft alone. Purchases for the CODEL included: Johnny Walker Red scotch, Grey Goose vodka, E&J brandy, Bailey’s Irish Crème, Maker’s Mark whiskey, Courvoisier cognac, Bacardi Light rum, Jim Beam whiskey, Beefeater gin, Dewars scotch, Bombay Sapphire gin, Jack Daniels whiskey, Corona beer and several bottles of wine.
• According to a “Memo for Record” from a March 29—April 7, 2007, CODEL that involved a stop in Israel, “CODEL could only bring Kosher items into the Hotel. Kosher alcohol for mixing beverages in the Delegation room was purchased on the local economy i.e. Bourbon, Whiskey, Scotch, Vodka, Gin, Triple Sec, Tequila, etc.”
• The Department of Defense advanced a CODEL of 56 members of Congress and staff $60,000 to travel to Louisiana and Mississippi July 19-22, 2008, to “view flood relief advances from Hurricane Katrina.” The three-day trip cost the U.S. Air Force $65,505.46, exceeding authorized funding by $5,505.46.

“Speaker Pelosi has a history of wasting taxpayer funds with her boorish demands for military travel. And these documents suggest the Speaker’s congressional delegations are more about partying than anything else,” said Judicial Watch President Tom Fitton.

Judicial Watch previously obtained internal DOD email correspondence detailing attempts by DOD staff to accommodate Pelosi’s numerous requests for military escorts and military aircraft as well as the speaker’s last minute cancellations and changes.

If we get hit with a once-in-a-century solar storm, we’re history

Cover of One Second After

Clifford D. May
The Sun Also Flares
Had the earthquake that hit Haiti shaken Florida instead, the death toll would not have been so tragically high — over 150,000 at last count. In Haiti, as in other impoverished countries, buildings are often shoddily constructed, infrastructure is weak, and governance is incompetent. The primary response to disaster: Wait for help from abroad.

It’s a well established rule: Rich nations endure natural disasters better than poor nations. But there may be an exception. Stay with me for a moment and you’ll see what I mean.

In recent years, Americans have become dependent not just on electricity but on computers, microchips, and satellites. The infrastructure that supports all this has become increasingly sophisticated — but not more resilient. On the contrary, as this infrastructure has become more complex, it also has become more fragile and therefore more vulnerable — an Achilles’ heel.

That is why, in 2001, the U.S. government established a commission to “assess the threat to the United States from Electromagnetic Pulse (EMP) attack.” Such an attack would involve the detonation of a nuclear warhead at high altitude over the American mainland, producing a shockwave powerful enough to knock out electrical power, electronics, communications, transportation, refrigeration, water-pumping stations, sewage systems, and much more. Think of a blackout, but one of indefinite duration — because we have no plan for recovery and could expect little or no help from abroad.

Historian William R. Forstchen researched what America would be like in the aftermath of an EMP attack for his novel One Second After. I don’t think I’m spoiling the experience for prospective readers by telling you that Forstchen is convinced the result would be millions of deaths from starvation and disease, a catastrophe from which America would never fully recover.

The EMP commission also reported that Iran — which is feverishly working to acquire nuclear weapons — has conducted tests in which it launched missiles and exploded warheads at high altitudes. The CIA has translated Iranian military journals in which EMP attacks against the U.S. are explicitly discussed.

Might Iran’s rulers orchestrate such an attack if and when they acquire nuclear capability? That is a heated debate among defense experts. But what is almost never discussed is the threat of a naturally occurring EMP event.

I first learned about this possibility a few months ago at a conference organized by Empact America, a bipartisan, non-profit organization concerned exclusively with the EMP challenge. Scientists there explained “severe space weather” — in particular, storms on the surface of the sun that could trigger an EMP event.

The strongest solar storm on record is the Carrington Event of 1859, named after Richard Carrington, an astronomer who witnessed the super solar flare that set off the event as he was projecting an image of the sun onto a white screen. In those days, of course, there was nothing much to damage. A high-intensity burst of electromagnetic energy shot through telegraph lines, disrupting communications, shocking technicians, and setting their papers on fire. Northern Lights were visible as far south as Cuba and Hawaii. But otherwise life went on as normal.

The same would not be true were a solar storm of similar magnitude to erupt today. Instead, the infrastructure we depend on would be wiped out. Most of us would not adapt well to this sudden return to a pre-industrial age.

How likely is a repeat of the Carrington Event? Scientists say it is not only possible — it is inevitable. What they don’t know is when. The best estimates suggest that super solar storms occur once every 100 years — which means we are 50 years overdue.

Both the EMP Commission and a 2008 study by the National Academy of Sciences (NAS) call for a response: hardening the electrical grid and other components of the infrastructure to increase the chances they would survive, as well as pre-positioning spares of essential, complex components of the electrical grid and other infrastructure critical to communications and emergency public services.

And it would certainly help if scientists could learn to forecast solar storms reliably. If we know one is coming, there are steps that can be taken to reduce the destruction. In particular, the electrical grid could be shut down; planes could be grounded (Air Force One is designed to withstand an EMP attack, but other planes would fall from the sky); citizens could be instructed not to leave home — in particular, to stay out of their cars, which would stop working — until the storm subsided.

President Obama has pledged $100 million to help Haiti recover from its recent earthquake. By coincidence, that’s precisely the amount that the NAS recommends be spent on measures that could limit by 60 to 70 percent the damage resulting from an EMP event. When you consider that such an event — whether naturally occurring or a “man-caused disaster” — could cause trillions of dollars in damage and claim more lives than were lost in World War II, that sounds like a reasonably priced investment.

— Clifford D. May, a former New York Times foreign correspondent, is president of the Foundation for Defense of Democracies, a policy institute focusing on terrorism and Islamism.

Glaxo Smith Kline to slash 4,000 jobs

BRITAIN’s biggest drugs company, Glaxo Smith Kline, is to axe up to 4,000 more jobs as part of its plans to restructure its workforce and focus increasingly on emerging markets.

The bulk of the cuts will be in America and Europe, and are part of the company’s efforts to shift resources away from low-growth territories into parts of the world with greater scope to expand sales.

Glaxo, which has been headed for nearly two years by chief executive Andrew Witty, employs 99,000 staff across the world and is expected to reveal plans for select cutbacks alongside its annual results this Thursday. This will be combined with a drive to make its research and development arm more cost-efficient.

Although the job losses will not be as severe as those announced last week by its rival Astra Zeneca, they will provide further depressing news for a sector that is fighting to contain costs as it reduces its reliance on big-selling blockbuster drugs, many of whose patents will soon expire.

Last week, Astra revealed it would cut 8,000 jobs. Its chief executive, David Brennan, warned that the company was unlikely to see a rise in sales for five years. More...

Major U.S. banks report gigantic profits for 2009

BRIAN WILLIAMS
Large U.S. banks reported huge profits for last year, the product of steps taken by Washington to bail them out of the worldwide financial crisis. Proposals by the Barack Obama administration for so-called bank reform and regulation don’t alter the capitalist government’s approach toward these giant financial institutions, which they consider “too big to fail.”

At the same time, millions of working people—considered by Washington not “too big to fail”—face rising long-term unemployment.

Goldman Sachs Group reported a record-high profit of $4.95 billion for the fourth quarter of 2009 and $13.4 billion for the entire year. JPMorgan Chase, the nation’s second-largest bank, said it more than quadrupled that quarter’s profit to $2.38 billion, making $11.7 billion in 2009. Wells Fargo made $2.8 billion in the fourth quarter, even while repaying $25 billion to the U.S. Treasury on its bailout loan.

The massive profits come as the Obama administration continues to serve these banks in numerous ways. Besides funds given to them through the Troubled Asset Relief Program beginning in late 2008, banks can borrow money at close to zero percent interest from the Federal Reserve. They then use these funds to buy Treasury securities yielding 3 percent interest instead of making what they consider uncertain loans to consumers and businesses.

To take advantage of these government policies, investment banks were allowed “to redefine themselves as ‘commercial banks,’ with special access” to Federal Reserve funds, noted the Weekly Standard.

Transferring ‘toxic assets’
“Toxic assets,” for the most part worthless mortgage-backed securities, are being transferred from the banks’ books to the government ledger. The Federal Reserve “holds more than $900 billion in mortgage-backed securities,” reported Crain’s New York Business, with plans to boost this to $1.25 trillion through the end of March.

With Paul Volcker, former chair of the Federal Reserve Board, at his side, Obama announced January 21 what he claimed would be “common-sense” reforms of the banking system. For months Volcker had been shuffled to the background by the White House in favor of Treasury Secretary Timothy Geithner and others more closely identified with big investment houses. Volcker calls for prohibiting commercial banks from owning or investing in hedge funds and limiting the use of federally insured deposit funds for “speculative” and “risky” investments, such as mortgage-backed securities.

Commercial banks, however, could continue to engage in such trading as long as “they could show regulators that they are doing it for their clients, not their own proprietary accounts,” reported MarketWatch Web site.

Volcker has been calling for reinstating the Glass-Steagall Act, in hopes that legally separating commercial and investment banks will halt the debt-driven frenzy inherent to the workings of capitalism. The U.S. rulers were forced to impose Glass-Steagall in 1933 in response to the wave of bank failures in the early years of the Great Depression. It was repealed under the William Clinton administration in 1999.

In a reflection of how little confidence the capitalists have that they have solved the financial crisis, doubts are being raised in Congress about ratifying a second term for Federal Reserve chairman Ben Bernanke, one of the leading proponents of the government’s use of hundreds of billions of dollars to bail out giant banks and the American International Group insurance company. His term expires January 31. Many in capitalist circles, however, are signaling that changing the head of the Federal Reserve could trigger greater financial calamity. “A prolonged delay would unsettle markets; a rejection could be even worse,” noted the Wall Street Journal.

Meanwhile, the number of workers facing long-term unemployment continues to rise. In December 6.1 million people had been without a job for more than six months, according to the Labor Department. The official unemployment rate in December was 10 percent, 15.3 million workers. But this does not count the 2.5 million persons the government claims are “marginally attached” to the labor force.