Progressive Breakfast is the morning roundup of what progressive movement members need to know to start the day.
"Horrific" Jobs Report
At 8:30 AM ET today, the Labor Dept. announced another 533,000 jobs were lost in November, making it 1.7 million 1.9 million jobs lost so far this year.
AP notes it's the worst month for job losses in 34 years. In advance of the report, The Big Picture's Barry Ritholz said anything over 500K would be "horrific."
That only adds to the urgency for a major job-creating economic recovery plan to avert an even deeper recession or depression. Losing another million jobs by letting the auto industry collapse would be going in decidedly the wrong direction.
Auto Rescue: Media Stresses "Skepticism," Leaves Out Facts
Congressional "skepticism" is the buzzword in several media reports of the latest round of testimony from the Big 3 Automakers. Many quote economist Mark Zandi's testimony that the companies would need far more than $34 billion in loans to survive.
But most leave out the rest of Zandi's testimony, that doing nothing would be worse.
Politico picks it up: "Zandi said that bankruptcy itself would be “cataclysmic” and far more costly since Chapter 11 in today’s credit market could lead to liquidation. He urged lawmakers to provide the $34 billion but in two tranches, and with strict conditions to ensure the CEO’s keep “on script” with the reforms that have been promised."
SEN. JACK REED: Mr. Zandi, you've set a price on the overall efforts to assist the companies of about $75 billion to $125 billion. You've also suggested that, if they're forced into bankruptcy, it would be -- whatever word you described.
MARK ZANDI, CHIEF ECONOMIST, MOODY'S ECONOMY.COM: I used cataclysmic.
REED: Catastrophic. Have you put a price tag on that, in terms of unemployment compensation, pension benefits?
ZANDI: Measurably more than that.
REED: Measurably more than that?
ZANDI: Yes.
REED: So we're not talking it's a close call?
ZANDI: Not a close call.
REED: Close call? Several hundreds of billions of dollars?
ZANDI: Yes, it's not even in the same universe, yes.
Meanwhile, ABC reports last night: "Democrats sent a clear message to the White House tonight - make some of the $700 financial industry bailout money available to the domestic auto industry or else. And they want an answer by Friday."
ABC also quotes Rep. Barney Frank turning up heat on President-Elect Obama: ""At a time of great crisis with mortgage foreclosures and autos, he says we only have one president at a time ... I'm afraid that overstates the number of presidents we have. He's got to remedy that situation."
Jed Report sides with Obama over Frank: "Keep in mind that Democrats are the majority party in Congress right now. If they can't stand up against these right wing bullies without the intervention of the President-elect, then there's no hope for them."
Zombie Lies Never Die
Media Matters spots CNN still using bogus $70/hr figure for union autoworker salaries.
Econospeak notes the actual difference between union and nonunion wages is actually small.
Christian Science Monitor reports on the non-union auto factories in the South, offering positive and negative assessments: "Labor historians note that President Franklin Roosevelt helped to raise wages across the board to get the US out of the Great Depression. Today, they say, many conservative Democrats and Republicans from the South ... are lobbying for the opposite to rescue Detroit. 'If and when the UAW is destroyed, what will happen to the transplants, like the Toyota plant in Kentucky and this new [Georgia] Kia plant, is that these companies will start offering Wal-Mart wages,' says [Director of the Center for the Study of Work, Labor and Democracy Nelson] Lichtenstein."
State Governments Feeling The Squeeze
Stateline: State budget gaps balloon to $97 billion. "Legislatures will either have to raise taxes or cut programs since, unlike the federal government, states must balance their budgets. The poor, in particular, face the prospect of losing government-sponsored health care coverage or reduced-priced lunches at school." (Click here for state-by-state details.)
Time also reports: "Revenues are dropping so fast that state budget cutters can't keep up, according to a report released by the National Conference of State Legislatures. States that collectively cut $40 billion in spending to balance their budgets over the summer are now facing another $32 billion shortfall as tax receipts come in below estimates, according to the report.
"In domino fashion, revenue shortfalls are leading to cuts in services around the nation and across the board. At least ten states, including Nevada, New York, Ohio and North Carolina have reduced budgets by as much as 7%, with ten more states considering such action. The pain is being felt from community colleges to prisons, from fire departments to courthouses, with major state responsibilities like Medicaid and elementary-school education taking hits."
Matt Yglesias on the importance of state and local aid in any economic recovery plan: "it’s important for a stimulus package to have a heavy element of aid to state and local government and related agencies. The federal government contains a lot of automatic stabilizers (spending keeps going even though revenues fall) that should act as stimulus, but those stabilizers are offset by the pro-cyclical nature of state and local budget practices. A federal promise of aid will forestall state and local budget cuts, and thus allow the automatic stabilizers to work."
O Canada!
The Canadian government is in turmoil, as the conservative minority government staved off a non-confidence vote from the progressive opposition coalition, by having the Queen of England's representative adjourn Parliament until January.
Canada-based The Reaction observes: "The key for the Conservatives, who are in government, will be to convince Canadians that they are in fact serious about dealing with the economic and financial crisis ... The key for the Liberals and the New Democrats ... will be to remain united, not to mention determined, through what promises to be a bitter and contentious campaign for public support over the next month and a half or so ... I have little to no confidence in Liberal leader Stéphane Dion's ability to keep them united and determined. He pales in comparison to Harper, a vastly more talented politician..."
