U.S. Economic/Financial News
Obama Economy Stimulates Homeless Tent Cities
May 5 (EIRNS)Tent cities are overflowing these days, and social workers are referring to a new breed of "economic homeless" to distinguish them from theoften drug-addicted or mentally ill"chronic homeless." The cover story in the May 5 USA Today documents the case of Pinhillas Hope, an outdoor shelter near St. Petersburg, Florida, established by Catholic Charities in 2007. "We're seeing a change in the population," says Charity COO Sheila Lopez, "a lot are either job-ready or working but have lost their home, because they were laid off, or their apartment, and now can't go to work, because they're not shaven, they're not clean, they're living in a car, or they're living on the street."
Pinhillas Hope now has 250 residents, 20% of whom are "economic" homeless, some with families. They are now starting to build 6x8 foot "sheds" to replace some tents, even build some studio apartments; and plan to open another shed park soon. The story describes such parks from Massachusetts to Reno, Nev., to Santa Barbara, Calif., some with patrons sleeping in vehicles, others putting up residents in motels, as long as charity money holds out. Many are fit for, and continue to search for, employment, which just isn't there.
BLS Admits Real Unemployment Almost 16%
May 8 (EIRNS)Under questioning by Sen. Amy Klobuchar (D-Minn.) at a hearing of the Joint Economic Committee today, Keith Hall, Commissioner, Bureau of Labor Statistics, admitted that real unemployment is much higher than even the official figure of 8.9%, the highest in 25 years. Here is an excerpt from the transcript:
Klobuchar: I just wanted to conclude here, summarizing what we've heard today, just sort of from a layman's way of looking at this. So this past month, we've seen 563,000 more people that are basically unemployed. Is that right?
Hall: Five hundred539,000.
Klobuchar: Five hundred thirty-nine thousand. And since the start of the recession, how many people are now unemployed?
Hall: The number of unemployed is now 13.7 million.
Klobuchar: Thirteen-point-seven million. I always think these numbers are important, as people have to realize across the country that, you know, it's not just one person messing up here, that there are a lot of people that have been affected by this recession for no fault of their own. We've seen a rise in the unemployment rate from last month's. It was 8.5%, and now it's 8.9%, right?
Klobuchar: And then that group that is so hard totofor people to get their arms around, the group I was talking about like the Johnsons [ph] of Blaine, Minnesota, who would like to work more hours, but are discouraged orwhat do you call themmarginal workers who are trying to increase those hours and just can't find the job, when you include them, we're at 15no, wait, 15.9% unemployment.
Hall: Fifteen-point-eight percent.
California Budget Meltdown Escalates
May 9 (EIRNS)New figures released from State Controller John Chiang's office show that revenues for last month for California were $2.1 billion below what had been projected in February, when the present budget sham was completed. Even after draconian budget cuts and increasing taxes, to eliminate a $40+ billion shortfall for fiscal year 2009-10, the state was left with an $8 billion shortfall. The latest figures of dramatically decreasing revenues show that even the $8 billion deficit figure was optimistic.
Further, the budget sham imposed in February by Gov. Arnold Schwarzenegger was adopted unanimously by Democrats in the Assembly and the Senate, with an unacceptable proviso attached: To get three Republicans to vote for it in each House, the Democrats agreed to support a series of ballot initiatives favored by Arnie, including Proposition 1-A, which is a repeat of the "Make Arnie the Dictator Act," rejected by voters in November 2005, due in large part to a strong mobilization by and labor unions. The Governor and Democratic leaders argue that if the ballot initiatives do not pass this time, the state will have at least a $20 billion additional hole. So far, polls show that voters will once again reject these initiatives, and the Democratic Party refused to endorse the initiatives at their recent convention in Sacramento.
In yet another setback for the Governator, the Federal government ruled that recent cuts in wages for health-care workers imposed by Arnold violate Federal standards, meaning that so-called stimulus funds for the state will be held back. These developmentsin addition to the Governor's own perverse self-conceptionexplain why Arnie is now willing to "begin the debate" on legalizing, and taxing, marijuana. Perhaps Arnie doesn't remember that he has already made cuts in the inadequate funds allocated to treat drug abusers.
GM Shuts Down 23 U.S. Parts Plants 'Temporarily'
May 7 (EIRNS)General Motors will temporarily close all or portions of 23 engine, transmission, and parts factories in the U.S. for several weeks, because of the closure of its 13 assembly plants for up to 11 weeks, announced on April 22. The assembly plant shutdowns affect 24,000 workers.
The additional parts plant shutdowns affect more than 18,000 hourly and salaried workers. Some parts plants will close for eight or nine weeks, while others will have only one product assembly line closed.
Of the 23 factories, the longest full-plant shutdowns will occur at the Baltimore, Md., and Toledo, Ohio, transmission factories, which will both close for eight weeks. The Willow Run Transmission plant in Ypsilanti Township, Mich. will have one of its assembly lines closed for nine weeks, from May 11 through July 13.
Nearly all stamping plants will see at least partial shutdowns from this week through the normal two-week summer shutdown that ends July 13. Engine plant closures vary from two to six weeks. Union agreements will give workers most of their pay during these shutdowns.
GM, surviving on $15.4 billion in government loans, is facing a June 1 deadline, to restructure or go into bankruptcy. GM has a 123-day supply of vehicles across its model lineup which it is trying to sell.