Subscribe to Dollars & Sense magazine. Recent articles related to the financial crisis. Male Worker Jobless Rate In June: 10.6 PercentA summary of today's BLS report from Bob Feldman:The official "seasonally adjusted" unemployment rate for male workers in the United States over 16 years-of-age increased from 10.5 percent to 10.6 percent between May 2009 and June 2009, according to the latest Bureau of Labor Statistics data. The official "seasonally adjusted" unemployment rate for white male workers increased from 9 percent to 9.2 percent between May 2009 and June 2009. For all U.S. workers, the "not seasonally adjusted" jobless rate increased from 9.1 percent to 9.7 percent between May 2009 and June 2009. The official "not seasonally adjusted" jobless rate for Black female workers over 20 years-of-age also increased from 11.1 percent to 11.7 percent between May 2009 and June 2009; and the official "not seasonally adjusted" jobless rate for all Black workers increased from 14.7 percent to 15.3 percent during this same period. The official "not seasonally adjusted" rate for all Black male workers over 20 years-of age was still 16.1 percent in June 2009. The official "not seasonally adjusted" jobless rate for Black youth between 16 and 19 years-of-age increased from 40.1 percent to 45 percent between May 2009 and June 2009, while the "not seasonally adjusted" unemployment rate for Hispanic or Latino youth was still 30.1 percent during this same period. The official "not seasonally adjusted" jobless rate for white youth between 16 and 19 years-of-age also increased from 21.1 percent to 25 percent between May 2009 and June 2009. Between May 2009 and June 2009, the official "not seasonally adjusted" jobless rate for Hispanic or Latina women jumped from 10.5 percent to 11.5 percent, while the "not seasonally adjusted" unemployment rate for Asian-American workers jumped from 6.7 percent to 8.2 percent during this same period. The official "seasonally adjusted" unemployment rate for all Hispanic and Latino workers in the United States in June 2009 was 12.2 percent. According to the Bureau of Labor Statistics' July 2, 2009 press release: "Nonfarm payroll employment continued to decline in June (-467,000)... Job losses were widespread across the major industry sectors, with large declines occurring in manufacturing, professional and business services, and construction ... "The number of long-term unemployed (those jobless for 27 weeks or more) increased by 433,000 over the month to 4.4 million. In June, 3 in 10 unemployed persons were jobless for 27 weeks or more... "Employment in manufacturing fell by 136,000 over the month… Within the durable goods industry, motor vehicles and parts (-27,000), fabricated metal products (-18,000), computer and electronic products (-16,000), and machinery (-14,000) continued to lose jobs in June. "In June, employment in construction fell by 79,000, with losses spread throughout the industry…Mining employment fell by 8,000 in June... "Employment in the professional and business services industry declined by 118,000 in June... Within this sector, employment in temporary help services fell by 38,000 in June... "Retail trade employment edged down in June (-21,000)…Over the month, job losses continued in automobile dealerships (-9,000). Employment continued to fall in wholesale trade (-16,000). "In June, financial activities employment continued to decline (-27,000)…In June, employment declined in credit intermediation and related activities (-10,000) and in securities, commodity contracts, and investments (-6,000). "The information industry lost 21,000 jobs over the month… "Employment in federal government fell by 49,000 in June, largely due to the layoff of workers temporarily hired to prepare for Census 2010..." --b.f. Labels: Black jobless rate, Bob Feldman, Bureau of Labor Statistics, Latino jobless rate, real unemployment rate Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Latino Jobless Rate Jumps To 12.7% In MayA summary of today's BLS report from Bob Feldman:The official "seasonally adjusted” unemployment rate for Latino workers in the United States increased jumped from 11.3% to 12.7% between April 2009 and May 2009, according to the latest Bureau of Labor Statistics data. The official "seasonally adjusted" unemployment rate for white male workers also increased from 8.5% to 9% between April 2009 and May 2009. For all U.S. male workers over 16 years-of-age, the officially "seasonally adjusted" jobless rate increased from 10% to 10.5% between April 2009 and May 2009. For all U.S. workers, the "seasonally adjusted" jobless rate increased from 8.9% to 9.4% between April 2009 and May 2009. The official "not seasonally adjusted" jobless rate for Black female workers over 20 years-of-age also increased from 10.5% to 11.1% between April 2009 and May 2009; and the official "not seasonally adjusted" jobless rate for all Black workers increased from 14.4% to 14.7% during this same period. The official "seasonally adjusted" rate for all Black male workers over 20 years-of age was still 16.8% in May 2009. The official "not seasonally adjusted" jobless rate for Black youth between 16 and 19 years-of-age increased from 33.5% to 40.1% between April 2009 and May 2009, while the "not seasonally adjusted" unemployment rate for Hispanic or Latino youth increased from 26.5% to 31% during this same period. The official "not seasonally adjusted" jobless rate for white youth between 16 and 19 years-of-age also increased from 18.8% to 21.1% between April 2009 and May 2009. According to the Bureau of Labor Statistics' June 5, 2009 press release: "...Employment fell by 345,000 in May...Steep job losses continued in manufacturing... "The number of unemployed persons increased by 787,000 to 14.5 million in May... "The number of long-term unemployed (those jobless for 27 weeks or more) increased by 268,000 over the month... "...The employment-population ratio, at 59.7%, continued to trend down... "Manufacturing employment fell by 156,000 in May...Three durable goods industries—motor vehicles and parts (-30,000), machinery (-26,000), and fabricated metal products (-19,000)—accounted for about half of the overall decline in factory employment...Mining shed 11,000 jobs in May... "Employment in construction decreased by 59,000 in May...In May, employment fell in nonresidential specialty trade contractors (-30,000) and in residential construction of buildings (-11,000)... "Retail trade employment was down by 18,000 in May...Employment in wholesale trade fell by 22,000 over the month... "Financial activities employment continued to decrease in May (-30,000). Securities lost 10,000 jobs and real estate lost 9,000...Employment in information decreased by 24,000 in May... " --b.f. See the full June 5th BLS "Employment Situation Report." Labels: Bob Feldman, Bureau of Labor Statistics, jobs, Latino jobless rate, unemployment Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Black Male Unemployment Jumps to 17.2%Black Male Worker Jobless Rate Jumps To 17.2% in AprilThe official "seasonally adjusted" unemployment rate for Black male workers over 20 years-of-age in the United States increased from 15.4 percent to 17.2 percent between March 2009 and April 2009, according to the latest Bureau of Labor Statistics data. The official seasonally adjusted jobless rate for Black female workers over 20 years old also increased from 9.9% to 11.5% between March 2009 and April 2009; and the official "seasonally adjusted" jobless rate for all Black workers increased from 13.3% to 15% during this same period. The seasonally adjusted unemployment rate for white male workers increased from 8% to 8.5% between March 2009 and April 2009 The seasonally adjusted rate for all Hispanic or Latino workers in April 2009 was 11.3%. For all U.S. workers over 20 years old, the seasonally adjusted jobless rate increased from 8.5% to 8.9 %between March 2009 and April 2009. The seasonally adjusted jobless rate for Black youth between 16 and 19 years old increased from 32.5% to 34.7% between March 2009 and April 2009, while the unemployment rate for Hispanic or Latino youth increased from 24.9% to 26.5% during this same period. According to the Bureau of Labor Statistics' May 8, 2009 press release: "...In April, job losses were large and widespread across nearly all major private-sector industries. Overall, private-sector employment fell by 611,000. "The number of unemployed persons increased by 563,000 to 13.7 million in April... "Among the unemployed, the number of job losers and persons who completed temporary jobs rose by 571,000 in April to 8.8 million.... "The number of long-term unemployed (those jobless for 27 weeks or more) increased by 498,000 to 3.7 million over the month... "About 2.1 million persons...were marginally attached to the labor force in April...These individuals wanted and were available for work...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 740,000 discouraged workers in April... "Nonfarm payroll employment fell by 539,000 in April to 132.4 million; private-sector employment declined by 611,000...In April, job losses continued in most major private-sector industries... "Employment in manufacturing fell by 149,000 over the month... "Construction employment declined by 110,000 in April... "The professional and business services industry lost 122,000 jobs in April....Half of the April decline occurred in temporary help services. "Employment in retail trade fell by 47,000 in April.... Wholesale trade employment was down by 41,000 over the month... "Employment in transportation and warehousing declined by 38,000 in April...Employment in financial activities declined by 40,000 over the month...The leisure and hospitality industry lost 44,000 jobs in April..." —b.f. Labels: Black jobless rate, Bob Feldman, recession, unemployment Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Black Male Jobless Rate: 16.1% in FebruaryFrom Bob Feldman; includes key excerpts from today's BLS report.Black Male Worker Jobless Rate: 16.1 Percent In February The official "not-seasonally adjusted" unemployment rate for Black male workers over 20 years of age in the United States increased from 15.8 percent to 16.1 percent between January 2009 and February 2009, while the "seasonally adjusted" unemployment rate for Black male workers increased from 14.1 percent to 14.9 percent, according to the latest Bureau of Labor Statistics data (http://www.bls.gov/news.release/empsit.t02.htm ) . The "not-seasonally adjusted" jobless rate for all Black workers over 20 years of age increased from 13.4 percent to 13.8 percent during this same period, while the "seasonally adjusted" jobless rate for all Black workers increased to 13.4 percent. For all U.S. workers, the "not-seasonally adjusted" jobless rate jumped from 8.5 percent to 8.9 percent between January 2009 and February 2009, while the "seasonally adjusted" jobless rate for all U.S. workers increased to 8.1 percent. The "not-seasonally adjusted" unemployment rate for white male workers also increased from 8.3 percent to 9 percent between January 2009 and February 2009. The "not-seasonally adjusted" jobless rate for Hispanic or Latino male workers increased from 11 percent to 12.1 percent between January 2009 and February 2009. Between January 2009 and February 2009, the "seasonally adjusted" jobless rate for Black youth between 16 and 19 years-of-age increased from 36.5 percent to 38.8 percent, while the "seasonally adjusted" jobless rate for white youth between 16 and 19 years-of-age was 19.1 percent. According to the Bureau of Labor Statistics' March 6, 2009 press release: "The number of unemployed persons increased by 851,000 to 12.5 million in February... "Among the unemployed, the number of job losers and persons who completed temporary jobs increased by 716,000 to 7.7 million in February... "The number of long-term unemployed (those jobless for 27 weeks or more) increased by 270,000 to 2.9 million in February... "In February, the number of persons who worked part time for economic reasons (sometimes referred to as involuntary part-time workers) rose by 787,000, reaching 8.6 million...This category includes persons who would like to work full time but were working part time because their hours had been cut back or because they were unable to find full-time jobs... "There were 731,000 discouraged workers in February, up by 335,000 from a year earlier. Discouraged workers are persons not currently looking for work because they believe no jobs are available for them... "Total nonfarm payroll employment dropped by 651,000 in February... "Employment in professional and business services fell by 180,000 in February. The temporary help industry lost 78,000 jobs over the month....In February, job declines also occurred in services to buildings and dwellings (-17,000), architectural and engineering services (-16,000), and business support services (-12,000). "Widespread job losses continued in manufacturing in February (-168,000). The majority of the decline occurred in durable goods industries (-132,000), with the largest decreases in fabricated metal products (-28,000) and machinery (-25,000). Employment in nondurable goods manufacturing declined by 36,000 over the month. "The construction industry lost 104,000 jobs in February... "Employment in truck transportation declined by 33,000 in February...The information industry continued to lose jobs (-15,000)... "Employment in financial activities continued to decline in February (-44,000).... In February, job losses occurred in real estate (-11,000); credit intermediation (-11,000); and securities, commodity contracts, and investments (-8,000). "Retail trade employment fell by 40,000 over the month...In February, employment decreased in automobile dealerships (-9,000), sporting goods (-9,000), furniture and homefurnishing stores (-8,000), and building material and garden supply stores (-7,000). Employment in wholesale trade fell by 37,000 over the month, with nearly all of the decline occurring in durable goods. "Employment in leisure and hospitality continued to trend down over the month (-33,000), with about half of the decrease in the accommodation industry (-18,000)..." --b.f. Labels: Black jobless rate, Bob Feldman, Bureau of Labor Statistics, jobs, recession, unemployment Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Black Male Jobless Rate: 15.8% In JanuaryAs bad as the general official unemployment numbers are, the real jobless rate for Black males appears to have no bottom. From Bob Feldman.The official "not-seasonally adjusted" unemployment rate for Black male workers in the United States jumped from 13.8 percent to 15.8 percent between December 2008 and January 2009, while the "seasonally adjusted" unemployment rate for Black male workers increased to 14.1 percent, according to the latest Bureau of Labor Statistics data. The "not-seasonally adjusted" jobless rate for all Black workers increased from 11.7 percent to 13.4 percent during this same period, while the "seasonally adjusted" jobless rate for all Black workers increased to 12.6 percent. For all U.S. workers, the "not-seasonally adjusted" jobless rate jumped from 7.1 percent to 8.5 percent between December 2008 and January 2009, while the "seasonally adjusted" jobless rate for all U.S. workers increased to 7.6 percent. The "not-seasonally adjusted" unemployment rate for white male workers also increased from 6.8 percent to 8.3 percent between December 2008 and January 2009. Between December 2008 and January 2009, the "seasonally adjusted" jobless rate for Black youth between 16 and 19 years-of-age increased from 33.7 percent to 36.5 percent, while the "seasonally adjusted" jobless rate for white youth between 16 and 19 years-of-age was 18.4 percent. According to the Bureau of Labor Statistics' February 6, 2009 press release: "In January, job losses were large and widespread across nearly all major industry sectors." ... "Both the number of unemployed persons (11.6 million) and the unemployment rate (7.6 percent) rose in January." ... "The civilian labor force participation rate, at 65.5 percent in January, has edged down in recent months." ... "Total nonfarm payroll employment fell sharply (-598,000) in January...In January employment declined in nearly all major industries." ... "Manufacturing employment fell by 207,000 in January, the largest 1-month decline since October 1982. In January, durable goods manufacturing lost 157,000 jobs, with notable decreases in fabricated metal products (-37,000), motor vehicles and parts (-31,000), and machinery (-22,000). Employment in nondurable goods manufacturing declined by 50,000 over the month." ... "Construction lost 111,000 jobs in January... Employment fell across most component industries over the month." ... "The temporary help industry lost 76,000 jobs in January... Professional and technical services lost 29,000 jobs in January." ... "Retail trade employment fell by 45,000 in January... In January, employment declined in automobile dealerships (-14,000), building material and garden supply stores (-10,000), department stores (-9,000), and furniture and home furnishing stores (-7,000). Over the month, wholesale trade employment fell by 31,000." ... "Transportation and warehousing lost 44,000 jobs in January...In January, employment fell in truck transportation (-25,000), support activities for transportation (-9,000), and couriers and messengers (-4,000)." ... "Employment in financial activities declined by 42,000 over the month...In January, job losses occurred in securities, commodity contracts, and investments (-15,000) and in credit intermediation (-10,000)" --b.f. Labels: Black jobless rate, Bob Feldman, Bureau of Labor Statistics, unemployment Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Black Male Jobless Rate In Dec. 2008: 13.4%From Bob Feldman; this repeats some of what we reported a couple of days ago, but it bears repeating...The "seasonally adjusted" official unemployment rate for Black male workers in the United States over the age of 20 jumped from 12.1% to 13.4% between November and December 2008, according to the latest Bureau of Labor Statistics data. In addition, the official jobless rate for Black youth between 16 and 19 years old in the United States increased from 32.2% to 33.7%, while the unemployment rate for white youth increased from 18.4% to 18.7%. The official jobless rate for Hispanic or Latino workers in the United States also increased from 8.6% to 9.2% between November and December 2008. The Bureau of Labor Statistics also summarized the December 2008 employment situation in the United States for all U.S. workers in the following way in its January 9, 2009 press release: Nonfarm payroll employment declined sharply in December, and the unemployment--b.f. Labels: Black jobless rate, Bob Feldman, Bureau of Labor Statistics, unemployment Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Big Three Spent $7.2 Billion On Ads In 2007One reason the Big Media conglomerates in the United States may want to see the Big Three transnational automobile companies get a big corporate welfare grant from the U.S. government is that GM, Daimler-Chrysler and Ford have, historically, been among the top buyers of advertising in the U.S. corporate media world. In 1999, for example, GM spent over $2.9 billion on advertising and was the Number 1 advertiser in the United States. That same year, the Number 3 advertiser in the U.S. was Daimler-Chrysler, which spent over $1.5 billion on advertising. And in 1999, Ford spent over $1.1 billion on advertising and was the Number 5 advertiser in the United States.In 2007, GM spent over $3 billion on advertising and was the Number 4 advertiser in the U.S., while Ford spent over $2.5 billion on advertising and was the Number 6 advertiser in the United States. In addition, over $1.7 billion was spent on advertising by Chrysler, which was the Number 14 advertiser in the United States. ("Advertising Age" chart for 2007 here.) --bf. Labels: advertising, auto industry, bailout, Bob Feldman Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). The Big Three's 1990s Corporate Welfare GrantIf GM, Ford and Daimler/Chrysler end up getting a big corporate welfare grant from the "U.S. Corporate Welfare State" before they begin their new wave of 2009 layoffs of UAW members, it won't be the first corporate welfare grant that the Big Three ever received.As Mark Zepezauer and Arthur Naiman noted in the 1996 edition of their book Take The Rich Off Welfare, during the 1990s the U.S. government gave "GM, Ford and Chrysler—whose combined 1994 profits were almost $14 billion--$333 million a year to develop more fuel-efficient cars;" yet "at the same time, the Big Three" propagandized "in favor of watered-down fuel-efficiency standards." During the 1990s, Ford, GM and Chrysler also "each used accelerated depreciation to defer a billion dollars in tax payments," according to the Take The Rich Off Welfare. The same book also recalled: "The extent to which automobiles dominate our lives didn't just happen by accident—at least part of it was the result of a criminal conspiracy. Back in the early 1930s, most people living in cities got around on electric streetcars. Concerned that this wasn't the kind of environment in which they could sell a lot of buses, General Motors, using a series of front companies, began buying up streetcar systems, tearing out the tracks, buying buses from itself and then selling the new, polluting bus systems back to the cities—usually with contracts that prohibited purchases of `any new equipment using fuel or means of propulsion other than gas.' Sometimes the contracts required that the new owners buy all their replacement buses from GM. "...In 1949—after these companies had destroyed more than 100 streetcar systems in more than 45 cities, including New York, Los Angeles, Philadelphia, San Francisco, Oakland, Baltimore, St. Louis and Salt Lake City—GM, Chevron and Firestone were convicted of a criminal conspiracy to restrain trade..." With regard to the most recent corporate welfare grant to the Big Three proposal, UAW Local 2334 President David Sole in Detroit recently wrote the following: "Handing more money to the same auto bosses who got us into this mess won't solve the problems the auto industry faces. "...They will continue to try to eliminate jobs and cut wages and benefits. Their only concern is maximizing profits, which is what led them to concentrate on making SUVs and trucks domestically, while shipping production of fuel-efficient cars overseas... "Since the auto bosses have brought the companies to the brink of ruin, the workers, their unions and the communities in which these factories are situated must assert their right to run the plants and replace the bloated, short-sighted executives and the big shareholders who kept them at the helm. "Worker-community control of the Big Three is the only solution. Under worker-community control the demand for government funds to rebuild and retool the plants to make energy-efficient cars and mass transit equipment could rally wide support." --bf Labels: auto industry, bailout, Bob Feldman, corporate welfare, financial crisis, UAW Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Who Rules GM?GM is famous for being one of the world's largest transnational industrial corporations, for laying off its U.S. factory workers before it lays off its cheaper labor in its factories outside the Untied States, for manufacturing tanks for both the German Army and the U.S. Army during World War II, and for being so mismanaged that it can't compete successfully with Japanese Establishment-owned automobile manufacturers. So what's good for General Motors is not necessarily what's good for most people in the United States.But as the GM web site reveals, in recent years GM's board of directors has included the following U.S. Establishment businesspeople: 1. Morgan Stanley, North Carolina Mutual Life Insurance, Cousins Properties and Erskine Bowles & Co. Director, Carousel Capital Senior Advisor, University of North Carolina President and former Clinton White House Chief of Staff Erskine Bowles. 2. Goldman Sachs Group Director, former Sara Lee Chairman/CEO and University of Chicago and Art Institute of Chicago Trustee John Bryan. 3. Merrill Lynch, Home Depot, AMR Director and Flagler Development CEO Armando Codina. 4.Coca Cola Chairman/CEO, former Sun Trust Banks Director and Center for Strategic International Studies and U.S. Council for International Business Trustee E. Neville Isdell. 5. Deutsche Bank Advisory Board Member and former Compaq Computer CEO Eckhard Pfeiffer. 6. BP and Union Pacific Director, former Alliance Energy Chairman/CEO, University System of Georgia Chancellor and University of Chicago and Carnegie Mellon University Trustee Erroll Davis Jr. 7. Harris Corporation, Home Depot, Catalyst Director, former Pfizer Vice-chairman, Pfizer Foundation Chairman, Essex Woodlands Health Ventures Senior Adviser and University of Chicago Trustee Karen Katen. 8. Former Northrup Grumman Chairman, Fluor, Avery Denison and Mannkind Director, MIT Lincoln Library Advisory Board Member, California Institute of Technology and Haynes Foundation Trustee Kent Kresa. 9. E.I. DuPont de Nemours Executive Vice-President and Tufts University Trustee Ellen Kullman. 10. Former Ernst & Young Chairman/CEO and Loew's, Discover Financial Services and Henry Schein Director Philip Laskawy. 11. Former GE Fleet Services CEO and Ceridian Chairman/CEO Kathryn Marinello. 12. Kohlberg Kravis Roberts Senior Advisor and former Eastman Kodak Chairman/CEO George Fisher. 13. Former Astra Zeneca PLC-UK Chairman Percy Barnevik. 14. Former GM de Brasil President, Duke University Trustee and Harvard Business School Dean's Advisory Board Member G. Richard Wagoner, Jr. Similarly, in the early 1990s, GM's board of directors included the following U.S. Establishment businesspeople: 1. Citibank/Citicorp, PepsiCo and Johnson & Johnson Director Roger Smith. 2. Chevron/Gulf Oil, Bechtel and Boeing Director George Shultz. 3. J.P. Morgan & Co./Morgan Guaranty Trust Director Dennis Weatherstone. 4. Citibank/Citicorp, AT & T, Metropolitan Life Insurance Director and Rockefeller Brothers Fund Trustee James Evans. 5. National Bank of Detroit/NBD Bancorp and American Airlines Director Charles Fisher III. 6. Merck & Co. and NCR Corp. Director John Horan. 7. Marriott Corp. Director J. Willard Marriott Jr. 8. Chase Manhattan Bank/Chase Manhattan Corp., International Paper Co., and Pfizer Inc. Director Edmund Pratt Jr. 9. J.P. Morgan & Co./Morgan Guaranty Trust and Procter & Gamble Director John Smale. 10. AT&T Director Thomas Wyman. So don't be surprised if the corporate folks who still rule the privately-owned and not yet-nationalized GM eventually get a big corporate welfare grant from the U.S. Establishment's federal government—-before GM's rulers once again start laying-off more of its U.S. factory workers in 2009 who are members of the UAW. --b.f. Labels: bailout, Bob Feldman, General Motors Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Black Male Jobless Rate: 11.9% in Nov.The official seasonally adjusted unemployment rate for Black male workers over 20 years of age increased from 11.6% to 11.9% between October 2008 and November 2008, according to the latest Bureau of Labor Statistics data.The official Black Youth unemployment rate for 16 to 19 year-olds remained at a Great Depression level of 32.3% in November 2008, while the official white youth unemployment rate for 16 to 19 year-olds also remained high at 18.4%. At least 533,000 more jobs were eliminated by U.S. employers between October 2008 and November 2008, according to the Bureau of Labor Statistics' December 2008 report on the November unemployment situation for U.S. workers. --b.f. Labels: Bob Feldman, financial crisis, recession, unemployment Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Recalling Big Banks' Role in Telecom BustFrom Bob Feldman:As long-time readers of Dollars & Sense probably realize, some of the same Wall Street big banks whose financially reckless banking practices helped create the "Great Recession of 2008-2009" [or since the NBER just dated the start of the recession to 2007, and since it'll probably last past 2009, we should say "of 2007-2010"? —Eds.] also apparently played a role in creating the late 1990s telecom industry bust. For example, according to the 2004 book by Roger Lowenstein, Origins of the Crash: "Gary Winnick, the architect of Global Crossing, a transoceanic fiber developer, was the most brazen of the bandwidth barons and, indeed, operated on a grand scale reminiscent of the original robber barons... "Working from an opulent Beverly Hills headquarters, whose inner sanctum was modestly designed to resemble the Oval Office, Winnick borrowed billions... "...The telecoms had a prodigious appetite for loans; moreover, the boom coincided with the repeal of Glass-Steagall, which had separated underwriting from banking. Banks such as Chase Manhattan (soon to be J.P.Morgan Chase) were now thirsting to move into underwriting. With telecoms equally thirsting for cash, banks used loans as bait to get the inside track on underwriting assignments, the precise abuse that Glass-Steagall had been intended to prevent. As Julie Creswell later revealed in Fortune, Chase was a notorious offender. It not only cut its fees to worm its way into banking deals; it courted Winnick...by introducing him to David Rockefeller, Chase's former chairman...Rockefeller escorted Winnick...on a private tour of the Museum of Modern Art. By such means, Chase became Global's banker and, indeed, the telecom industry's commercial banker of choice. There is no evidence that the bank of David Rockefeller was overly concerned with whether demand for bandwidth was truly insatiable or—in the event it was not—with how its loans would be repaid...In 1999, Global showed earnings of $10 million—before, that is, Global's interest expense of $92 million. No banker—no genuine banker—would lend on the basis of such numbers, suggesting mightily that Chase and the rest were scrambling after fees—were, that is, risking their shareholders' capital in order to book short-term profits..." —b.f. Labels: banking system, Bob Feldman, Roger Lowenstein, telecom industry Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Geithner & Kiss. Ass., ConclusionFrom Bob Feldman--the last part of his series on Treasury-Secretary-to-be Timothy Geithner.Treasury Secretary-Designate Geithner's Kissinger Associates Background--Conclusion Between 1986 and 1989, U.S. Treasury Secretary-Designate Timothy Geithner was employed at Henry Kissinger, Brent Scowcroft and Lawrence Eagleburger's Kissinger Associates influence-peddling firm, which also employed George W. Bush's former special envoy to Iraq, L. Paul Bremer, during the early 1990s. Commerce Secretary-Designate Bill Richardson, also is a former employee of Kissinger Associates. In its April 30, 1989 article by Jeff Gerth and Sara Bartlett, titled "Kissinger And Friends And Revolving Doors," the New York Times observed that at the same time Henry Kissinger operated his Kissinger Associates influence-peddling operation, Treasury Secretary-Designate Geithner's former business colleage also "had a continuous window into the government's most sensitive information as a member of the President's Foreign Intelligence Advisory Board or Pfiab." According to the Times, the President's Foreign Intelligence Advisory Board was "a little-known but powerful group" of 16 scientists, business executives and former U.S. government officials which advises the U.S. President about intelligence issues and intelligence activities. At least one former Pfiab official, "who asked not to be identified because of the board's secrecy pledge," told the Times in 1989 that Henry Kissinger, "using his authority as a board member, frequently reviewed intelligence documents outside the regular board meetings." The former Pfiab official also told the Times that he believed that Kissinger's Pfiab membership gave Kissinger special business benefit because Kissinger "could not have separated the insights gained from his access to United States intelligence data from his continuing analysis and advice" to his Kissinger Associates clients--during the period when Treasury Secretary-Designate Geithner was employed at Kissinger Associates. In the year prior to taking office in the Bush I Administration, former Deputy Secretary of State Lawrence Eagleburger earned $674,000 from his work for Kissinger Associates and an affiliated Kent Associates firm (which paid $214,000 of the total Eagleburger earned from his `consulting' work for special, private corporate clients). After posing the rhetorical question "What exactly do they do for that much money?" the Times concluded in its April 30, 1989 "Kissinger And Friends And Revolving Doors" article that "little is known about what Kissinger Associates does for its clients." The Times also reported in 1989 that "When the Senate Foreign Relations Committee tried to elicit more information" on Kissinger Associates activities at his confirmation hearing, Eagleburger "was adamant in his refusal to discuss any details" with the Senate Foreign Relations Committee. Former Deputy Secretary of State Eagleburger did promise, however, "to disqualify himself for one year from matters involving his clients at Kissinger Associates," according to the Times. Given Treasury Secretary-Designate Geithner's past association with Kissinger Associates during the same period that Eagleburger worked for the firm, perhaps Geithner should, like Eagleburger, also agree to disqualify himself for one year from matters involving Kissinger Associates clients, especially since banks (like the Midland Bank of Britain) have been among the clients of Kissinger Associates, historically? And, as a member of the House Banking Committee in the early 1990s, former Representative Henry Gonzalez of Texas, wrote me in a July 16, 1991 letter: "For your information, the House Banking Committee's on-going investigation into the Banca Nazionale del Lavoro (BNI) scandal has revealed some new evidence of potential conflicts of interest involving National Security Director Brent Scowcroft, Henry Kissinger and Kissinger Associates. "Upon learning of this fact, I have asked President Bush, in a letter dated May 2, 1991, to review Mr. Scowcroft's stock portfolio to ensure any potential conflicts are eliminated. "I was deeply concerned about Mr. Scrowcroft's stock holdings, especially since he is in a position to strongly influence our national security and foreign policies. "Rest assured, I am following this matter with careful attention, and will continue to monitor Mr. Kissinger and Kissinger Associates to ensure they do not practice improper influence over U.S. foreign policy." (end of article) Labels: Bob Feldman, Kissinger Associates, Timothy Geither, Treasury Department Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Geithner & Kiss. Ass., Pt. 3The third part of Bob Feldman's article on Geithner's Kiss.-Ass. connections.Treasury Secretary-Designate Geithner's Kissinger Associates Connection—Part 3 Between 1986 and 1989, U.S. Treasury Secretary-Designate Timothy Geithner was employed at Henry Kissinger, Brent Scowcroft and Lawrence Eagleburger's Kissinger Associates influence-peddling firm, which also employed George W. Bush's former special envoy to Iraq, L. Paul Bremer, during the early 1990s. Commerce Secretary-Designate Bill Richardson also is a former employee of Kissinger Associates. Geithner's former associate at Kissinger Associates, Henry Kissinger, was not too pleased when some New York Times reporters in the late 1980s decided to write an investigative article about Kissinger Associates' clients and their past links to former Deputy Secretary of State Lawrence Eagleburger, who was the Kissinger Associates president before he moved into his State Department office in 1989. On April 14, 1989, for example, the Wall Street Journal reported that Henry Kissinger was "annoyed" at the Times for its "investigation of Kissinger Associates' clients" and was "threatening a lawsuit against the paper for harassing clients." The results of this New York Times investigation of Kissinger Associates were published on April 30, 1989, in an article titled "Kissinger And Friends And Revolving Doors" by Jeff Gerth and Sarah Bartlett. The article noted that, initially, another former Kissinger Associates colleague of Geithner, former National Security Affairs Adviser Brent Scowcroft, "told the White House he was merely a consultant to Kissinger Inc." and only "later amended his financial disclosure statement to reflect his position as vice-chairman." According to the 1989 New York Times article, Scowcroft also "told the White House he had to disclose only the name of Kissinger Associates, not the specific clients he worked with, because he was merely a consultant to the firm." Scowcroft only amended the financial disclosure statement he had filed on February 21, 1989 (to indicate that he was actually the former Kissinger Associates vice-chairman) on March 17, 1989, "one day after a reporter asked him why he had not reported" his true Kissinger Associates post on his original financial disclosure form. On his public disclosure form, according to the 1989 New York Times article, Treasury Secretary-Designate Geithner's former colleague, Scowcroft, indicated that he would "disqualify himself from specific matters involving companies he" held "stock in and former clients such as Kissinger Associates, but not from matters involving the firm's clients." The New York Times also reported in 1989 that "among those willing to pay $200,000 or more to be clients of Kissinger Associates are ITT, American Express, Anheuser-Busch, Coca Cola, H.J. Heinz, Fiat, Volvo, LM Ericsson, Daewoo and Midland Bank." The "Kissinger And Friends And Revolving Doors" article also reported in April 1989 that Treasury Secretary-Designate Geithner's former colleague, Scowcroft, "belatedly disclosed that he held stock in Kissinger Associates and, according to Mr. Kissinger and public documents, he arranged last month to have Mr. Kissinger buy it back for nine times its estimated worth"; and that Scowcroft's Kissinger Associates salary had exceeded $293,000 per year during the time that Geithner was employed by Kissinger Associates. (end of part 3) --bf Labels: Bob Feldman, Kissinger Associates, Timothy Geither, Treasury Department Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Geithner & Kissinger Associates--pt. 2From Bob Feldman:Treasury Secretary Designate Geithner's Kissinger Associates Connection--Part 2 Between 1986 and 1989, U.S. Treasury Secretary-Designate Timothy Geithner was employed at Henry Kissinger, Brent Scowcroft and Lawrence Eagleburger's Kissinger Associates influence-peddling firm, which also employed George W. Bush's former special envoy to Iraq, L. Paul Bremer, during the early 1990s. Commerce Secretary-Designate Bill Richardson also is a former employee of Kissinger Associates. Among the political influence-peddling firms in the United States, "Mr. Kissinger and his associates are by all accounts the most successful of this new breed of former senior Government officials," according to the April 20, 1986 New York Times Magazine article, titled "Kissinger Means Business: Corporate America is eagerly seeking Henry Kissinger's insight and celebrity." The "Kissinger Means Business" article also implied that the motive of these former and current senior Government officials for moving back-and-forth between U.S. foreign policy-determination roles and private influence-peddling position was generally a mercenary one, asserting that "many of these former Government leaders asked themselves, why not capitalize on our stardom, international contacts and insider knowledge to make large incomes on our own." In 1986, U.S. Treasury Secretary-Designate Geithner's former colleagues at Kissinger Associates—Kissinger, Scowcroft and Eagleburger—peddled their special influence to 25 to 30 corporate clients in exchange for payments from their clients that totaled $5 million in Kissinger Associates gross income. Each political influence-purchaser paid Geithner's former employer between $150,000 and $420,000 per years for its services because, as former New York Times national security correspondent Leslie Gelb observed in 1986: "The super-star international consultants were certainly people who would get their telephone calls returned from high American Government officials and who would also be able to get executives in to see foreign leaders." When I telephoned the Kissinger Associates office in Manhattan in early 1991 to ask who some of its clients were at that time, a spokesperson for Kissinger Associates replied: "That's all confidential." The April 20, 1986 New York Times Magazine article indicated, however, that besides the Kuwaiti government-owned Midland Bank of Britain, the Kissinger Associates client list--at the time Treasury Secretary-Designate Geithner was employed by Kissinger Associates--included H.J. Heinz, American Express/Shearson Lehman, Fiat, Volvo, ASEA, L.M. Ericsson of Sweden, Montedison of Italy, the International Energy Corporation, Atlantic Richfield/ARCO and the Fluor Corporation. Although Henry Kissinger was the sole owner of Kissinger Associates when Geithner was employed by his firm, former National Security Affairs Adviser Brent Scowcroft and former Deputy Secretary of State Lawrence Eagleburger each received hefty salaries when they worked as Kissinger's partners in influence-peddling, prior to assuming their influential posts in the Bush I Administration in 1989. To further attract foreign government-owned corporations like Midland Bank of Britain as influence-purchasing clients, Kissinger Associates also established a board of directors that included the following international corporate establishment figures around the time that Treasury Secretary-Designate Geithner was employed by Kissinger Associates: former U.S. Treasury Secretary William Simon; former Citibank Chairman of the Board Edward Palmer; former U.S. Under-Secretary of State William D. Rogers; then-S.F. Warburg Chairman Lord Roll; then-Atlantic Richfield/ARCO Chairman Robert O. Anderson; then-Volvo Chief Executive Office Pehr Gyllenhammar and former Japanese government foreign minister Saburo Okita. (end of part 2) --bf Labels: Bob Feldman, Kissinger Associates, Timothy Geither, Treasury Department Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Big Three Spent $30 Million on Lobbying in '08From Bob Feldman:If you check out the Center for Responsive Politics, you'll notice that General Motors, Ford, and DaimlerChrysler have already spent $20 million in 2008 on lobbying Congress, the White House and federal government agencies to serve their special transnational corporate interests. GM, for example, spent over $10 million on lobbying the federal government in 2008, while Ford and DaimlerChrysler each spent over $5 million on lobbying federal agencies, the U.S. Congress and the White House in 2008. In addition, during the 2008 election cycle, U.S. automobile industry political action committees (PACs) and U.S. automobile industry executives made over $14.6 million in campaign contributions to Democratic or Republican candidates for federal office. To see a list of all the Members of Congress who accepted campaign contributions from the U.S. automobile industry in 2008, click here. --bf Labels: auto industry, bailout, Bob Feldman, Center for Responsive Politics, Chrysler, financial crisis, ford, General Motors Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Billionaires and the 'Great Recession'From Bob Feldman:Should 'Great Recession' Burden Be Borne By U.S. Billionaires? As more layoffs of U.S. working-class people and U.S. middle-class people are announced by the transnational corporations, the local, state, or federal government agencies and the tax-exempt "non-profit" sector private institutions of the United States in late 2008, it again looks like the burden of a U.S. economic crisis is being placed on the backs of U.S. working-class and middle-class people--instead of on the Super-Rich folks who most profited from the global and U.S. economy during the 1990s. Yet in an authentically democratic society, the economic burden of the "Great Recession of 2008 and 2009" would be borne by the upper-class people who are most able to afford to make some economic sacrifices in their living standards: the U.S. Billionaires and Multi-Millionaires whose daily business activities helped cause the current global economic crisis. In written testimony submitted by the Executive Director of the Foundation for the Advancement of Monetary Education, Lawrence Parks, before the House Banking and Financial Services' Subcommittee on Capital Markets, Securities and GSE's on May 24, 2000, for example, the multi-millionaire "principals" of hedge funds and billionaire George Soros were mentioned as having played a role in contributing to the global economic crisis of the late 1990s and early 21st century. According to the Foundation for the Advancement of Monetary Education's executive director's May 2004 testimony: For several years John Meriwether's Long-Term Capital hedge fund garnered many hundreds of millions, perhaps more than a billion, dollars annually in 'profit' from currency and derivative trading. Consider the 3,000 other hedge funds along with major banks and brokerage firms doing the same thing. All told...I reckon these folks are pulling around $50 billion out of the markets each year. Citibank alone, according to its 1997 annual report, garnered $2 billion from this activity. --bf Labels: bailout, Bob Feldman, financial crisis, George Soros, Lawrence Parks Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Black Jobless Rate: 11.1% In OctoberFrom Bob Feldman:Despite the election of a Democratic Party majority in the U.S. Congress in November 2006, the official unemployment rate for Black workers was still 11.1 percent in October 2008 under the current U.S. economic system, according to the latest Bureau of Labor Statistics data. And if the conclusion of Harry Shutt's 1998 book The Trouble With Capitalism is accurate, even the recent election of Barack Obama and the creation of a Democratic Party-controlled White House staff (headed by Rahm Emanuel--a former managing director of the Wasserstein Perella investment bank, before it became part of Dresdner Kleinwort Wasserstein) isn't likely to soon reduce the Black jobless rate very much. According to Shutt: ...An assessment based on historical evidence and analysis of the more recent conjecture of economic forces leads us to the conclusiion that only a veritable miracle could avert an eventual...world-wide financial and economic collapse such that the organs of state (whether national or international) will be too impoverished to prevent...Political attention must soon begin to focus on alternatives to the profits system... --bf Labels: Black jobless rate, Bob Feldman, Harry Shutt, unemployment Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Bank Failures And Presidential TransitionsThis is from Bob Feldman:During periods of U.S. establishment presidential transitions in the past, U.S. commercial banks have sometimes failed. Presidential Transitions, by Laurin Henry, describes, for example, what happened after the 1932 presidential election: "In the final months of President Hoover's term, the nation reached the bottom of the depression. Financial panic swept the country and paralyzed most of the banking system... --bf Labels: bank failures, Bob Feldman, financial crisis, Herbert Hoover Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Barney Frank's JP Morgan Chase ConnectionFrom Bob Feldman:Since 1989, the corporation whose Political Action Committee [PAC] or executives have been the top source of campaign contributions for the House Financial Services Committee Chairman, Barney Frank, has been JP Morgan Chase & Company. A Democratic Congressional representative from Massachusetts, Frank has accepted over $70,000 in campaign contributions from JP Morgan Chase executives or its PAC since 1989, according to the Center for Responsive Politics web site data base at www.opensecrets.org. In 2007, for example, Rep. Frank accepted $6,000 in campaign contributions from JP Morgan Chase's PAC, according to the JP Morgan Chase web site. Coincidentally, Frank recently helped push through Congress a Wall Street corporate welfare bill which authorized the U.S. Treasury Department to invest $25 billion in JP Morgan Chase. In a January, 1996, I asked Rep. Frank, in a phone interview for the now-defunct Lower East Side alternative weekly, Downtown, why his campaign committee had accepted a $500 contribution from then J.P. Morgan vice-chairman Robert Mendoze in April 1995. "I'm surprised by the question," Frank replied in 1996. "There's no alternative to accepting such contributions, although I'm in favor of public financing of campaigns. I am on the banking committee and I accept contributions from many different contributors. But none of these contributors will determine how I vote on the banking committee." According to Frank, when he first ran for Congress he received no campaign contributions from banking industry executives. But apparently, after some banks saw that, as a House Banking Committee member, Frank favored allowing banks to again enter the securities business, he began to receive some campaign contributions from people in the banking industry. Asked in 1996 how he'd respond to the argument that the acceptance of a campaign contribution from a bank executive by a member of the House Banking Committee, which passes legislation that regulates banks, represents a conflict of interest, Frank replied in 1996: "That's nonsense." According to the Massachusetts representative, it was as ethical for him to accept campaign contributions from corporate special interest groups and JP Morgan's vice-chairman as it was for him to accept campaign contributions from public interest groups, labor union members or organizations that favor the legalized use of marijuana for medical purposes. Yet in the appendix of his 1992 book, Still The Best Congress Money Can Buy, Philip Stern defined "conflict-of-interest' receipts as "contributions given to, and accepted by, that lawmaker from groups having a particular interest in the decision of the legislative committee on which that lawmaker sits (e.g....gifts by banks and other financial PACs to members of the House Banking Committee)..." Stern also indicated in this same book that the "conflict-of-interest" receipts accepted by Rep. Frank between 1985 and 1990 exceeded $149,000. The chairman of the JP Morgan Chase board of directors' Risk Policy Committee and a member of the JP Morgan Chase corporate board's Public Responsibility Committee, General Dynamics board member James Crown, has also been a heavy campaign contributor to 2008 Democratic Presidential candidate Barack Obama's campaigns since 2003. On June 27, 2003, for example, JP Morgan Chase board member Crown gave a $10,000 campaign contribution to Obama's campaign committee, prior to Obama's 2004 election to the U.S. Senate. Coincidentally, U.S. Senator Obama also supported using U.S. Treasury Department money to help bail out JP Morgan Chase. Other members of the JP Morgan Chase board of directors besides James Crown include Exxon Mobil's retired chairman of the board and former CEO Lee Raymond and Comcast Cable Communications President Stephen Burke. --bob f. Labels: barney frank, Bob Feldman, JP Morgan Chase Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Was Wall Street's Banking Crisis Predictable?This is from former D&S collective member Bob Feldman:If you check out back issues of D&S and books like The Trouble With Capitalism: An Enquiry Into The Causes of Global Economic Failure by Henry Shutt, Origins of the Crash by Roger Lowenstein and American Theocracy by Kevin Phillips, you can see that Wall Street's banking crisis and crash of 2008 was a predictable one. Of course Clinton Administration Treasury Secretary, Robert Rubin (who's apparently been advising the 2008 Democratic Party presidential candidate on how to solve the current crisis), played a big role in pushing for more U.S. banking industry deregulation in the 1990s. As Roger Lowenstein observed in his 2004 book, Origins of the Crash: "In the spring of 1998, when...the Commodity Futures Trading Commission proposed a study...to revisit the question of whether to regulate derivatives, Greenspan, along with Rubin, quashed the idea... Coincidentally, under the recent bipartisan corporate welfare bailout plan that both the Republican and the Democratic presidential candidates endorsed, $25 billion of U.S. Treasury tax dollars is to be invested in Citicorp stock. And, coincidentally, the fourth-largest source of 2008 campaign contributions ($499,598) for even the Democratic Obama presidential campaign came from executives of Rubin's failing Citicorp firm. Labels: Bob Feldman, financial crisis, Henry Shutt, Kevin Phillips, Robert Rubin, Roger Lowenstein Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). |
