Saturday, October 11, 2003

labor news round up 

That wraps up this week's Blogonaut Labor News Roundup.

This week we see the UFCW gearing up for fights brought on by years of complacency. Labor continues to gear up for 2004. And we continue to sift through the consequences of recent bargaining by the UAW.

Here is a local note from Erik Haunold at SEIU Local 49 here in Portland:

Workers' Rights Board Public Hearing on Immigrant Workers' issues

Tuesday, October 14th 7-9 pm
IRCO, NE 103rd & Glisan

Come hear testimony from immigrant workers about the challenges they face which impact our whole community: attacks on civil liberties, lack of freedom to organize and bargain collectively, the need for family reunification policies, and the exploitation of immigrant labor by unscrupulous employers. We will also hear about the connection between immigrant rights' struggles and the struggle for global justice. The Workers' Rights Board panel conducting the hearing will include Multnomah County Commissioner Serena Cruz.

For more information, call Jobs With Justice: 503.236.5573


From Newsday:
WASHINGTON -- Organized labor is stepping up its effort to educate, register and mobilize blacks, Hispanics, women and young voters -- using a model that proved so successful in 2000 that it was copied by some Republicans in elections two years later.

A new organization called Voices for Working Families hopes to raise $20 million to $25 million for a voter registration drive aimed at increasing participation, said Gerald McEntee, chairman of the group and president of the American Federation of State, County and Municipal Employees.

"Voices for Working Families will build on organized labor's successful political education campaign, we will take our campaign to working people whether in unions or not," McEntee said Monday. "Our strategy is to reach households in the targeted communities with at least 10 personal contacts, including door-to-door visits, telephone calls, mail and e-mail."

The political organization is one of many being set up to capture millions of dollars in unregulated money that can no longer be contributed to political parties under the campaign finance law. While the group is considered a nonprofit, nonpartisan organization, it will work against the re-election of President Bush, who labor leaders have said pursues policies hostile to working families.

New Mexico Gov. Bill Richardson said the group's goal is to register 500,000 Hispanic voters, targeting four battleground states -- Arizona, Florida, New Mexico and Nevada.

"Republicans are fighting for the Hispanic vote, but it will take more than Spanish lessons for Republican candidates to convince Hispanics that Republicans support the average working family," Richardson said.

The 16 battleground states also include Iowa, Maine, Missouri, Michigan, Minnesota, New Hampshire, Ohio, Oregon, Pennsylvania, Washington, West Virginia and Wisconsin.

Geraldine Ferraro, Walter Mondale's running mate on the Democratic ticket in 1984, said women around the country will be asked to walk precincts regularly to help register voters.

AFL-CIO President John Sweeney said he is "urging all of our unions to give this our full support." The AFL-CIO and its affiliated unions will do its own voter mobilization drive aimed at union members.

The voter drive is using organized labor's efforts as a model because the movement has effectively delivered votes for Democratic presidential candidates in the past. The labor vote provides a core of Democratic support that even extends to white voters, a major demographic group that Democratic presidential candidates have not carried for decades, according to a report by the National Annenberg Election Survey.

Almost six in 10 voters from labor households voted for Democrat Al Gore in the 2000 election. The Annenberg survey found that white voters from labor households went for Gore by a 55-40 margin. White women from that group supported Gore by a 60-35 margin and white men were almost evenly split between Gore and Bush.

From the NY Times:

abor leaders have sharply criticized new financial disclosure regulations that the Labor Department issued on Friday, asserting that the Bush administration is intent on retaliating against unions.

"These new rules are blatantly political," said Jonathan Hiatt, the A.F.L.-C.I.O.'s general counsel, charging that the administration wanted to punish labor for supporting many Democrats and battling the president on numerous issues. "They aim to send a retaliatory message."

But administration officials said the new rules were not designed to punish labor, but to prevent union corruption and provide union members with more information about their unions' operations and financial health.

The Labor Department said that the new regulations, released after it received more than 35,000 public comments, were needed because the old rules did not require enough disclosure. In defending the rules, department officials noted that this was the first major effort to update the rules in 44 years.

"The current financial disclosure forms that unions file provide little of value to rank-and-file members about their union's finances and operations, and they have failed as an effective deterrent against financial misconduct," said Elaine L. Chao, the secretary of labor. "Too many workers are being hurt by the wrongdoing of a few."

Under the new rules — which require more disclosure than the old rules — local, regional and national unions with annual income of $250,000 or more must report expenditures of $5,000 or more. Unions will also be required to detail how much they spend on political activities and lobbying, on union administration and on strike benefits.

In its executive summary, the Labor Department said: "More transparency and disclosure are needed. While most union leaders are people of integrity, there are still bad apples. In fact, over the past five years, convictions for union corruption have averaged 11 per month."

To buttress their assertions of improper retaliation, labor leaders noted that the new rules were issued the day after the House of Representatives voted down the administration's overtime proposals, which unions had lobbied against, saying they would deprive millions of workers of overtime.

"The Bush administration's rules are craftily designed to weaken unions — the strongest advocates for American workers — as our nation prepares for the 2004 elections," said the A.F.L.-C.I.O.'s president, John J. Sweeney.

Edmund Frank, a Labor Department spokesman, said the regulations' timing had nothing to do with the overtime vote.

Mr. Sweeney said the new rules went far beyond what was required of other nonprofit organizations. He said the rules would require huge amounts of paperwork for 5,000 labor organizations and would cause the dumping of a large amount of minute information into the Labor Department's database at major expense.

Representative Sam Johnson, Republican of Texas, who is chairman of a subcommittee on employer-employee relations, praised the rules, saying: "Today's action by the department will help ensure that the country's unions will be held to a higher standard. This means that millions of rank-and-file union members will know exactly how their hard-earned dues are spent."

The regulations require unions to estimate the percentage of time each union official and employee spends on political activities, on union representation matters, on administration and on other business. This will help government officials determine whether unions are evading campaign finance requirements.

"There are good reasons and bad reasons that labor is opposed to these rules," said Carl Biers, executive director of the Association for Union Democracy, a New York-based group that advocates for union members' rights. "The good reason they oppose it is the administration's intent is clearly to undermine unions' increasing political activities. The unsavory reason for opposing it is these rules will make it easier for union members to discover corruption by union leaders. Unfortunately there is a bureaucratic mentality even in honest unions that they should avoid giving information to their members."

uaw blows it big time 

From the NY Times:

DETROIT, Oct. 6 — The Chrysler Group's new contract with the United Automobile Workers union, ratified by workers last month, fell short of one of the union's top goals: persuading DaimlerChrysler to recognize what are known as card checks to unionize American plants owned by the Mercedes division.

The union has never successfully organized a plant owned solely by a foreign automaker, but it had hoped it might have an opportunity at Mercedes because the 1998 acquisition of Chrysler by Daimler-Benz put Mercedes and Chrysler under the same corporate umbrella.

There are considerable obstacles to organizing plants owned by foreign companies. Many are in the South, where sentiment often runs against unions and right-to-work laws mean workers do not have to automatically join unions even if their workplace is organized.

...Soon after the U.A.W. and Chrysler reached a tentative agreement last month, a union summary of the contract provided to Chrysler workers and obtained by some news organizations said DaimlerChrysler had agreed to card checks at all of its plants in the United States and listed it as one of seven highlights of the contract talks. The 17-page summary added that DaimlerChrysler would send letters to employees saying "the company `fully respects' the right of employees to form and join unions" — essentially expressing neutrality instead of opposing organization.

But Chrysler executives contend nothing in the contract covered Mercedes. Instead, the contract itself refers specifically to the DaimlerChrysler Corporation, which in the DaimlerChrysler corporate lexicon is a synonym for the Chrysler Group's operations in the United States, as opposed to DaimlerChrysler A.G., which is based in Stuttgart, Germany, and is the parent of both Chrysler and Mercedes.

Further confusing the union's summary was a statement that card checks had been a successful tactic for workers at Freightliner, a division of DaimlerChrysler A.G.

"The contract refers to Chrysler Group manufacturing facilities in the United States," said Mike Aberlich, a spokesman for Chrysler, which has long been organized, except for some very small operations.

The union's international leadership in Detroit has declined requests for comment on the highlighting of the card check agreement in the contract summary.

I think that someone at the UAW fucked up big time. This is disastrous for Gettelfinger who has been making concessions in exchange for card check. He's been getting grief from the Labor Notes / New Directions crowd, but I think its the right strategy. But you can't make mistakes like this. Yikes!

From the Detroit Free Press:

Three times a month, Jim and Joyce Kennedy pay bills together at the kitchen table, until Joyce's arthritis hurts too much for her to hold a pen.

It's a ritual they've shared at their tidy mobile home in White Lake Township since Jim retired in 2001, after working 35 years at General Motors Corp.'s Pontiac Truck and Bus plant.

They should be able to keep paying their bills and the co-payments on more than a dozen medications they take regularly. But it won't get any easier under the newly ratified UAW national contract -- the first contract since 1967 that doesn't increase the basic monthly pension for current retirees. The Free Press estimates the annual savings for Detroit's three automakers and two largest suppliers is about $200 million.

In the give and take of the 2003 national contract, much of the giving was done by the UAW's 522,000 retirees, surviving spouses and dependents. It's these kinds of concessions, often buried quietly in the details of a massive contract, that automakers hope will help them cut costs and regain customers and market share from foreign rivals like Toyota Motor Corp.

For the last three-plus decades, UAW retirees could count on a small increase in their annual pensions, at least $30 a month. In the 1999 contract, for example, UAW pensions for existing retirees increased by $37.50 per month or $450 a year for a worker who retired after 30 years.

"I will not say that the takeaways in this contract will make us destitute, but it's going to make us a lot less comfortable," said Jim Kennedy, a former UAW official.

part-time people also sometimes work 40 hours, but they don’t have the right to medical insurance or any benefits 

From In These Times:

When H&M, the highly successful “cheap chic” Swedish clothing retailer, opened its first Chicago store on fashionable North Michigan Avenue, some things went as planned: Young, attractive clerks dressed in black cheered and danced to music as a long line of youthful customers walked in the door. But H&M hadn’t planned on another opening-day feature: a couple hundred protesters, many of them garment workers in red UNITE T-shirts, shouting “no justice, no peace” and carrying posters reading “Abuse is in style at H&M.”

UNITE organized the protest at the opening to bring public pressure to bear on H&M, as it and many other unions often do in their organizing campaigns. They intend to continue a variety of pressure tactics until the company agrees not to interfere with UNITE’s efforts to organize, says UNITE senior researcher and organizer Scott Zdrazil. H&M has yet to respond to the union’s actions.

new troublemakers handbook exerpts 

From Dollars and Sense:

Organized labor could use a shot in the arm. Today, the percentage of U.S. workers in unions continues to fall despite massive organizing drives. Public-sector workers have been stripped of basic rights by the most anti-union administration in U.S. history. The hostile political climate and economic downturn have pressured many unions into concessionary bargaining. And immigrant workers—the base of many service sector and light manufacturing unions—are weathering a new nativist crackdown.

But amid all the bad news, there are unions and rank-and-file groups fighting back with innovative campaigns and shop-floor actions. Here are ten recent efforts of note...

macy's day parade 

From Newsday:

Several hundred Macy's workers held a lunchtime rally outside the retailer's flagship store in Manhattan's Herald Square yesterday to protest not being paid for days Macy's closed during the massive blackout this summer. About 500 unionized workers participated in the 2 1/2-hour rally, said Ken Bordieri, president of Local 1-S of the Retail, Wholesale and Department Store Union.

Bordieri said some members, who include Macy's sales clerks and housekeeping and stockroom workers, missed as much as two days' pay. Some who worked the night shift were told not to report after the blackout hit just after 4 p.m. on a Thursday, Bordieri said, and they were told not to come in the next day. The store reopened that Saturday, the union said. The union represents about 3,500 Macy's workers, in Herald Square, Queens Center mall, the Bronx and White Plains.

Bordieri maintained that while his members weren't paid, Macy's executives were. "We don't agree with that policy," he said. "That means our workers are subsidizing Macy's when it should be the other way around."

Why did this take so long? I'm willing to bet that union reps were cold shouldering the complaints from members and the members wouldn't let it drop.


From the Chicago Tribune:

A court battle scheduled for Friday between US Airways and its mechanics union throws a spotlight on one of the most divisive issues that airlines and their workers have faced in recent years: maintenance outsourcing.

The issue has become a source of strife during labor negotiations and a source of bitter frustration for mechanics whose jobs disappear after their work is subcontracted out to other companies. Airlines say they save money by outsourcing; mechanics say they can do the work at a reasonable cost if given the chance.

Last spring, more than 1,100 mechanics found themselves out of work when United Airlines closed an $800 million heavy maintenance facility in Indianapolis. Northwest Airlines has cut about one-third of its mechanics since 2001 while expanding its use of outsourcing to save money.

"It's discouraging, and it hurts our craft," said O.V. Delle-Femine, national director for the Aircraft Mechanics Fraternal Association, which represents mechanics at several airlines, including Northwest, Southwest and United. "We're licensed professionals, and we don't know what goes on at those third-party maintenance bases," he said.

Now, the International Association of Machinists and Aerospace Workers is fighting a US Airways plan to outsource heavy maintenance work for relatively new jets that need such work for the first time. The union contends the airline has the capability of doing the work in-house and therefore, under their contract, may not subcontract it. The airline says it is unable to do that work in-house but is checking into the feasibility of building a facility and buying equipment for the work.

at it again 

From the Yale Daily News:

About 300 supporters rallied with Yale-New Haven Hospital workers outside the office of hospital board chairwoman Julia McNamara GRD '80 Wednesday to press the board to settle a new contract with better wages and pensions.

The rally -- which took place at Albertus Magnus College, where McNamara serves as president -- featured a number of speakers who called on the hospital's board to renew contracts for members of the Service Employees International Union District 1199, which represents about 150 dietary workers. The workers, who have not had a contract since January, returned to work Sept. 23 after participating in a three-week strike but are still negotiating new contracts.

freedom riders 

From the New York Daily News:

Ramon Ramirez had been riding the bus for 12 days going on 30 years - ever since the day he first heard Cesar Chavez.
Ramirez and his fellow farmworkers came to New York last weekend all the way from Woodburn, Ore., a dusty agricultural community of 20,000 people in the Willamette Valley.

Along the way, they stopped at several rallies as part of the Immigrant Workers Freedom Ride. They were welcomed by the governor of Iowa and the mayor of Omaha, by congressmen, bishops and union leaders. Sunday morning, their bus, one of dozens that converged on New York from all over the country, headed for the final big rally in Flushing Meadows-Corona Park in Queens, where 100,000 immigrants, union members and other supporters gathered.

For Ramirez, the New York rally brought back bittersweet memories.

In 1972, he had been a student at Salesian High School in East Los Angeles when Cesar Chavez came to speak.

piled high and inside for a called strike 

From All Things Considered:

Chicago Garbage Strike Settled
Chicago's nine-day garbage strike ends after striking teamsters vote to accept an agreement with private garbage companies. Garbage haulers promise to work through the night to clear piled-up trash. Hear NPR's Cheryl Corley.

From the Guardian:

CHICAGO (AP) - Striking garbage collectors reached a tentative agreement early Thursday to end an 8-day-old walkout that left stinking, rat-infested piles of trash throughout the Chicago area.

The Teamsters union was set to vote on the deal later in the day and said garbage trucks could start hauling away the rubbish by nightfall. The 3,300 union workers handle garbage for 17 private waste haulers that serve Chicago's high-rises and the suburbs.

During the walkout, Mayor Richard Daley sent city sanitation workers to clear away the trash around Wrigley Field, where the Cubs are hosting the National League Championship Series.

The settlement between the union and the Chicago Area Refuse Haulers Association was reached after a nearly 20-hour bargaining session with a federal mediator.

The deal gives garbage collectors a 28 percent increase in wages and benefits over the next five years. "We believe it's a fair proposal. It addresses the needs of our members, and we are very grateful to the mediator,'' Teamsters Local 731 spokesman Terry Hancock said. Hancock said if the deal were approved, garbage trucks would work through the night until all the trash was picked up.

The Teamsters went on strike after talks reached an impasse over wages, benefits and the length of the contract. The workers make $10 to $21 an hour.

clean up aisle five 

From All Things Considered:

California Grocery Strike Looms
The union representing more than 70,000 California grocery clerks orders a walkout after rejecting a contract proposal from three supermarket chains. The United Food and Commercial Workers plan a walkout at one of the region's big chains -- Ralph's, Von's or Albertson's -- on Saturday. NPR's Scott Horsley reports.

From the Desert Sun:

PALM SPRINGS -- On the eve of federally mediated talks aimed at averting a threatened supermarket strike, local grocery stores were gearing up for the reality that a work stoppage could occur very soon, perhaps on Saturday.

The United Food and Commercial Workers union plans to announce this morning the official results of voting by nearly 70,000 Southern California members on whether to strike the Albertsons, Ralphs and Vons grocery store chains. Negotiators remain far apart on a new contract. A previous pact expired Oct. 5.

A grocery strike would be the first since 1978. It would affect nearly 2,000 workers at 22 grocery stores in the Coachella Valley -- eight Ralphs, eight Vons and six Albertsons.

Pre-strike preparations go beyond those stores that are part of the conflict. For example, non-union Jensen’s Finest Foods, which has five valley stores, is gearing up to serve an expected influx of customers who don’t want to cross picket lines. "We are expecting an increase in customers," said Adam Zack, a Jensen’s vice president based in Palm Springs. "How many that entails is hard to say." For now, Zack said, Jensen’s is increasing its orders by about 10 percent on most grocery staples. He said regular food deliveries to individual stores would increase as needed during a prolonged strike.

..."Those workers do something that is very basic and very necessary for people -- handling and selling their food to them," said Palm Springs resident Michael Contrattor, just outside the Ralphs at Smoketree Village. "I think they deserve basic benefits for what they do for the public."

...At issue in the UFCW talks are a number of economic matters, including moves by the grocery chains to freeze pension funding and have workers pay more for health insurance. The stores also want to install a two-tier pay system that would bring newer workers in at lower levels, and eliminate some pay differentials, such as those for working Sundays.

The stores say they need the concessions to stay profitable in the face of rising health-care costs and increased competition from non-union players like Wal-Mart. The union contends that concessions would cost workers vital, hard-earned benefits and cause economic hardship. Comments from both sides Thursday, as well as plans being made by the union-targeted stores indicated that a strike was a near-certainty.

"If the employers have not budged from their absurd proposal, there’s going to be a strike," said UFCW spokeswoman Ellen Anreder.

clean up aisle six 

From the St. Louis Post Dispatch:

The impact of a strike and lockout of 10,000 grocery workers began to ripple Thursday beyond the three major chains affected.

Other grocers not involved in the strike are seeing historic increases in business. But small retailers in strip malls anchored by Schnucks, Dierbergs and Shop 'n Save stores are taking a hit, as many shoppers avoid picket lines. And thousands of union members who are not part of the strike and lockout involving United Food and Commercial Workers Local 655 also are out of work.

A number of competing grocers were caught off-guard by the strike, which started Tuesday at Shop 'n Save and quickly was followed by a lockout at Dierbergs and Schnucks. In all, 97 stores on the Missouri side of the St. Louis area are being picketed. No stores in Illinois are affected.

...Other unions also felt the sting of lost work.

About 2,000 members of Meat Cutters Local 88 have refused to cross picket lines at the three chains. Five hundred members of Bakers Union Local 4 also are refusing to cross at Dierbergs and Schnucks. The Bakers union does not have members who work at Shop 'n Save.

"It's going to be a struggle," said Kathy Beck, a Meat Cutters union member, who is the deli manager at a Shop 'n Save in St. Peters. As with other Meat Cutters and Bakers union members, Beck could have chosen to work but never seriously considered doing so.

"I have to work every day with these people (in Local 655). I could not, in my heart, walk through that door," she said.

Other grocery unions also could be affected in the long-term, including two United Food and Commercial Workers locals in Illinois. Local 534 represents Schnucks workers in Cahokia and East St. Louis; Local 881 represents workers in all other stores in the Metro East area. Contracts for the two locals expire in September. Typically, workers in Illinois receive wages and benefits similar to those in Missouri.

Other unions were experiencing an immediate impact. Nineteen Teamsters who deliver products by truck from warehouses to Shop 'n Save were replaced by nonunion drivers, said Dan McKay, president of Teamsters Local 600 and a spokesman for four St. Louis area Teamsters locals. The Teamsters drivers cannot be laid off and continue to be paid, McKay said. "They're getting paid for 40 hours a week and all benefits," McKay said. "It's costing (the company) an ungodly sum of money."

Lori Willis, a spokeswoman for Schnucks who has been fielding media calls for the three chains, said the switch was made because the Teamsters will not cross picket lines. But she acknowledged that other Teamsters drivers are not being replaced. Instead they're stopping short of the stores, while supervisors drive the trucks to the docks. She could not explain why one set of Teamsters were replaced and others were not. "We're working very aggressively to find an alternate way to get product from point A to point B," she said.

From the St. Louis Post Dispatch:

On Day 4 of a strike and lockout involving 10,000 workers and the area's three largest supermarket chains, the union cried foul against one of the companies.

At the same time, a small group of union members began circulating a petition asking for a new vote.

The president of United Food and Commercial Workers Local 655 on Friday accused Shop 'n Save Warehouse Foods Inc. of intimidation. The company, Robert Kelley said, asked striking workers to meet with managers before picking up their paychecks. "Instead of negotiation, they're trying to bully people," Kelley said. "It's just intimidation."

...About 1,800 members of Local 655 at Shop 'n Save went on strike Tuesday morning. Soon after that, Dierbergs Markets Inc. and Schnuck Markets Inc. locked out a combined 8,300 members of Local 655. Employees of Dierbergs and Schnucks are being mailed their checks, Willis said.

...Meanwhile, some members of Local 655 who voted against the strike are promoting a grassroots effort for a new strike vote.

Kelly Knierim, a Dierbergs employee, is passing out fliers asking members to attend a meeting at 10 a.m. Friday at the Local 655 hall in Ballwin. Knierim said about 20 workers are working to hand out the fliers, starting with Shop 'n Save workers who crossed picket lines and returned to work.

A union spokesman said he doubted the effort would succeed. "This is a non-story," Ed Finkelstein said. "The members have clearly spoken. The reality is that 72 percent voted" to strike.

fall out 

From the Contra Costa Times:

CONCORD - Labor leaders spent millions of dollars and barnstormed the state to defeat the recall but then woke up after election day to find that rank-and-file union members had defied them by supporting Arnold Schwarzenegger in large numbers.

The inability of labor to deliver a powerful pro-Gray Davis voting bloc was attributed to the speed of the election and the governor's deep-seated unpopularity. But it also revealed a lack of voting discipline on the part of union workers who benefited from pro-labor Davis policies. Voters from union households voted "no" on the recall ballot by a slim majority -- 52 percent, according to the Los Angeles Times' exit poll.

The lack of support stands in stark contrast to other core Democratic constituencies, such as blacks (79 percent against the recall), liberals (75 percent) and Jews (69 percent).

"Support was lukewarm," said John Dressel, an Ygnacio Valley High School math teacher and a local union representative of the anti-recall California Teachers Association. "You got a lot of rhetoric from Davis, but things don't look much different," he said. "There are still 35 kids in each classroom."

Mark Sanders, a janitor at the school, broke from his union, Public Employees Union Local No. 1. He voted for Schwarzenegger because the actor promised to revoke the vehicle license fee increase. "I don't have the money," Sanders said. "I'm going to have to borrow it."

Alex Rose, a social studies teacher at Ygnacio Valley, was one of Dressel's colleagues who ignored the teachers union's endorsement by voting against Davis. "I just don't like the guy," said Rose, who voted for Green Party candidate Peter Camejo.

That sentiment proved to be Davis' greatest obstacle. "The governor's unfavorables were so high that the election was insurmountable for him," said Art Pulaski, head of the California Labor Federation. Pulaski said that labor spent $5 million to oppose the recall. Though a quarter of his umbrella group's 2.1 million members are registered Republicans, he believed more than a slight majority would have voted against the recall if union locals had more time to educate members and members' families. "The election cycle was too short for people to have a chance to scrutinize the candidates and the issues," Pulaski said.

Unions did not sit on their hands during the election. Service Employees International Union Local 1877, representing 28,000 janitors and other workers, paid for 200 of its members to take off work to campaign full-time. Members of the union also spent long hours calling members and walking precincts for its Latino Vote Project. Yet union members needed to be reminded of Davis' record, said president Mike Garcia, who pointed out that even union members in his family disliked the governor and planned to vote for Schwarzenegger.

Despite the defeat, Garcia said that the campaign was a helpful, if unintentional, warm-up for the presidential election next year. He also predicted that unions would retain power in Sacramento. "We still have the state Legislature," he said.

Election watchers said that the Schwarzenegger victory should not be viewed as the collapse of labor. "All the political organizing in the world couldn't make Gray Davis a nice, likable guy and couldn't hurt Arnold's celebrity," said Peter Dreier, professor of politics and public policy at Occidental College. "Unions had an uphill battle, a lot of their constituents go to the movies."

But the recall loss is still a huge blow for labor's influence. "They have a governor who is not going to be friendly to organized labor and to working men and women," said state Sen. John Burton, D-San Francisco. "When you get a Republican administration, you automatically have labor's influence diminished and business clout goes up."

Schwarzenegger has already promised a bare knuckles fight in renegotiating the state's union contracts.

internal sag politics 


The Screen Actors Guild (SAG) negotiation chairman for the 2000 commercial contract has said he will personally vote against the newly proposed spot pact. So will Gordon Drake, who came in a distant third in the recent race for national president of SAG. Kent McCord, SAG's national treasurer who came in second in the recent presidential race, said he has yet to see the commercial-pact proposal, so couldn't comment on whether he favored or opposed it; but he added he had heard that the agreement represents "the lowest overall deal in the history of this contract."

SAG and the American Federation of Television and Radio Artists (AFTRA), who co-negotiated the tentative new pact, on Monday mailed out ballots to 128,846 eligible members to vote on the proposed new three-year contract.

David Jolliffe, who led SAG's spot-pact talks three years ago, cited concerns that there would be no "pro-con statement" going out this week with ballots. He also stated criticism of the SAG negotiating team's quick approval of the new pact, and what he considers as low levels of wage increases announced in the contract.

"Taking the public positions I take and others take puts us in awkward positions," Jolliffe -- recently voted as an alternate for the SAG/Hollywood board of directors -- told Back Stage on Tuesday. "We all want to have good relationships with producers because these are the people we work for. So when you publish that Jolliffe does not support the new commercial contract, it sets us up for repercussions; just as there are repercussions if I would say, 'Yeah, it's a great contract.' So it's very awkward for me to talk to you about it. I don't take these public positions lightly."

Still, Jolliffe said flatly of the new pact, "I don't like it. Three years ago, in commercial on-camera cable rates we established a pattern regarding, in the third year, a 140% increase. This year's negotiation brought that back to a 5% increase, obliterating the pattern we set. The overall increase in the contract is 6.5%, the lowest overall increase for this contract that we've ever gotten. So I'm sorry to say I can't support it. But my overall disappointment is that they have again refused to send out a minority report, or pro-con statement, to fully inform the members."

Jolliffe was a member of McCord's Membership First slate. And, while McCord lost the presidential vote to Melissa Gilbert by 50% to 42%, the Membership First slate won 10 of the 12 open seats for the SAG/Hollywood board. Jolliffe said those new board members voted for a minority report while the rest of the board, made up of Gilbert supporters, did not.

"You've got to remember that 93% of the commercials contract is earned by SAG members, and over half of that is in Hollywood," Jolliffe said. The spot pact brings in about $1 billion a year.

stupid, stupid, stupid 

WASHINGTON - One of the nation's largest labor unions will back Dick Gephardt in the Democratic presidential race, giving the candidate more foot soldiers in his White House bid.

The United Food and Commercial Workers International Union, which represents about 1 million workers in the United States, plans to endorse Gephardt based on his broad plan for universal health care. Gephardt's proposal is "the best plan for preserving the employer-based health care system in this country," union spokeswoman Jill Cashen said Friday.

I guess the UFCW likes bargaining over health insurance concessions. Why would you want to preserve that as a union. More importantly, why would you throw your weight behind someone who doesn't stand snowballs chance in hell of beating George Bush. Of course this is the union that threw it's resources into harassing non-union grocers to try to raise their standards so it wouldn't be so hard to bargain union contracts.

Friday, October 10, 2003

washington state teacher's strike 

From the Tacoma News Tribune:

MARYSVILLE - As a teachers strike in Marysville became the longest in state history Thursday, Gov. Gary Locke pressured the district to hold school next week whether teachers have a contract or not.

"This strike has gone on far too long, and neither side has shown a sense of urgency to resolve these issues," Locke said after meeting with both sides in Olympia. "That is unacceptable." The teachers rejected Locke's suggestion, saying they won't work without a contract. Locke has no authority to order them back to class.

Thursday was the 38th day since Marysville's 690 teachers went on strike over pay and benefits, leaving 11,000 students without classes. Each side blames the other for the stalemate.

...Marysville teachers want an 11 percent raise over three years, while the school board has proposed a salary freeze, said Washington Education Association spokesman Rich Wood. Also, Marysville teachers want to stick with a local salary schedule. In general, union negotiators say, the state schedule pays younger teachers more while the local schedule pays midcareer and highly experienced teachers more.

Expect to see this become an issue around the country as districts seek to attract new teachers as an aging workforce begins to retire. Districts will want to attract new hires with more money but won't have money to increase everyone's salary proportionately. As the teacher's salaries have fallen behind other professions over the last thirty years, it is becoming increasingly difficult to attract young people to the teaching profession. The problem is particularly acute in math and sciences where jobs are plentiful and pay well. Expect teacher's unions not to give a shit.

Thursday, October 09, 2003

more joppolos 

This is an excellent report on the work of Gen. David Petreaus who seems to be getting it right in Mosul.

From All Things Considered:

Keeping the Peace in Mosul
NPR's Deborah Amos reports on reconstruction and pacification efforts by U.S. forces in and around the northern Iraqi city of Mosul. The regional commander, Gen. David Petreaus, is a former economics professor with a doctorate in international relations who has taken an innovative approach to nation-building.

Mosul Calm as Rebuilding Efforts Get Under Way
NPR's Deborah Amos has the second in a two-part series of reports about postwar developments in the northern Iraqi city of Mosul. Unlike central Iraq, Mosul is relatively calm, and U.S. forces in the city have made a successful start of reconstruction in the region.

loan a man a fish 

Something Josh Marshall said a few weeks ago really rubbed me the wrong way and I've been meaning to address it, but I've been too busy. The Salon article excepted below moved it up to the top of my list.

On September 17th Josh wrote:

In the last month I've become increasingly convinced that the effort to use Iraq to pad the pockets of friendly companies in the US is a real story. In the past I always sort of shied away from the Halliburton contracts storyline.

... one hears more and more examples of contracts getting very inexpensive bids from local Iraqi companies, only to end up in the hands of American companies whose bids are an order of magnitude higher. I don't think you have to figure wholesale corruption or even favoritism is taking place, at least not only that. The people who award the contracts are likely acting under provisions which (understandably and rightly) give preferential treatment to American companies. And many of the people making the calls probably have little knowledge of Iraqi society or business practices and thus little way of evaluating the trustworthiness and reliability of local operators.

...Today Juan Cole notes how Halliburton was given early contracts on a no-bid, emergency basis. But under government guidelines they now have 'experience' in the region and thus a big leg up on future contracts. Cole says "most other large contractors have given up even trying for those contracts." He also notes this article about how we've nixed a local provider of cell phone coverage in favor of MCI Worldcom, which of course did such a bang up job here in the USA.

There is, moreover, a serious question about how much this issue of contracts is a hang-up in our efforts to get other countries involved in getting Iraq back on its feet.

PS. I've had a number of comments, not a few rather intemperate, taking me to task for saying that "the contracts are likely acting under provisions which (understandably and rightly) give preferential treatment to American companies." I think the clear import of the whole post is that this may not be a good idea in this case. However, the regulations in question here are general ones. And as a general matter, when the US government pays to have this or that done, I think we rightly give preference to American companies. But the key is 'preferential.' And that means that all other things being equal we give preference to our own folks. But clearly in Iraq all things aren't equal.

The PS was added since I last saw the post. Interesting because that is exactly what got me.

Firstly, and this has nothing to do with anything Josh said, the idea of providing support for reconstruction as a loan rather than a grant is foolish. We bombed the country, we failed to provide security during that crucial first month, we made the decision to invade and occupy. Forcing Iraq to be indebted to the US isn't the best way to start this relationship. Fortuneately, nearly everyone in any position of responsibility agrees.

Secondly, I don't think that things being equal, we should not give preference to US contractors. I believe that things being equal, we should give preference to Iraqi contractors. In fact I think we should give preference to Iraqi contractors period. I would suggest that where possible contracts should be awarded to Iraqis, with US companies bidding to provide support and training to fledging and under resourced Iraqi firms. Perhaps the US could form a business corp like the peace corp (but with bigger stipends) to help Iraqi's form business and to help existing business rise to the challenge of reconstruction. At the very least all opportunities to steer contracts to Iraqi firms should be explored even if it means that the only way US firms can participate is as partners.

Give a man a fish. Feed him for a day. Teach a man to fish...

I understand that in some cases Iraqi firms would function as little more than fronts for the US firms they partner with. Fine. So what. What's a little corruption between friends.

PS You know what happens when you loan a man a fish? It smells like crap when he finally gives it back.

friends and the friendly friends who befriend them 

Salon has created a guide to who's who in the rush to profit from the war:

The lobbyists. Late in September, the Washington newspaper The Hill reported that some of the president's closest political allies had created a new firm, New Bridge Strategies, whose main goal is to help corporations "evaluate and take advantage of business opportunities in the Middle East following the conclusion of the U.S.-led war in Iraq." The company, which is headed by Joe Allbaugh, Bush's chief of staff in Texas and his campaign manager in 2000, was not exactly hard to find -- it has a Web site that boasts of its intimate ties to government officials: "New Bridge Strategies principals have years of public policy experience," the site says. The company's directors "have held positions in the Reagan Administration and both Bush Administrations and are particularly well suited to working with international agencies in the executive branch, Department of Defense and the U.S. Agency for International Development, the American rebuilding apparatus and establishing early links to Congress." Other New Bridge partners include Ed Rogers, vice chairman of the lobbying firm Barbour Griffith & Rogers, and a close political aide to George H.W. Bush; and Lanny Griffith, also at Barbour Griffith, who served in several positions in Bush senior's White House, including as Southern political director in the 1988 campaign.

You might think it a bit unseemly for the president's close friends to use their proximity to power to profit from a war that the administration assured us had nothing to do with profiteering, but that's only because you're naive. According to Allbaugh and the others at New Bridge, having friends in high places is no reason not to make money; that's how things work in Washington, it's not at all unusual. "Because my friend is president of the United States, I'm supposed to check out of life?" Allbaugh asked the New York Times on Friday.

... On Oct. 2, the Washington Post reported that the Livingston Group, the firm headed by former Rep. Robert Livingston ... is also quite interested in working for companies looking to take part in the Iraqi reconstruction. One firm Livingston is helping is De La Rue, a British paper company. De La Rue has already received a contract to print Iraq's new currency, and it wants to work on secure travel documents, too. A Livingston lobbyist told the Post that he was rather busy pitching De La Rue's case to a number of influential members of Congress. "We're trying to get the right people to ask the right questions of the right people," he said.

De La Rue, incidentally, provides a good indication of how lucrative working in Iraq can be. The company's fortunes had been flagging recently; in July, the Justice Department began an investigation of De La Rue ... -- news of the investigation sank De La Rue's stock. Thanks to Iraq, things now look fine for the firm. In September, the company said that its profits would soar, mostly due to its reconstruction

Halliburton. In March, Kellogg Brown & Root, a subsidiary of Halliburton, signed a contract with the Defense Department to fight fires in Iraq in the event that Saddam Hussein tried to destroy his oil fields during the war. The contract seemed fishy from the start. It was awarded on a "no-bid" basis; only Halliburton was asked to do the work. The Defense Department has subsequently been suspiciously cagey about its details, slow to answer questions about the contract's size and specific purpose. Only in April, a month after it was signed, did the Army Corps of Engineers disclose (in response to questions from Henry Waxman) that the contract was potentially worth $7 billion to Halliburton. It took another month for the Army Corps to say that Halliburton would not only fix damaged oil facilities but would also operate oil centers and even distribute the oil. (Waxman's complete correspondence with the Army Corps is here.)

... Halliburton has made quite a bit of money in Iraq. So far, it has received about $1.2 billion under the oilfield contract -- more money than any other firm working in Iraq. Moreover, Cheney's insistence that he has no financial stake in the company is dubious. Since he became vice president, Cheney has continued to receive checks in deferred compensation from the company -- he got almost $150,000 in 2001 and $162,000 in 2002, and he will keep getting money until 2006. The White House denies that this represents a financial interest in the company; because he purchased an insurance policy on the compensation, Cheney will get the money regardless of Halliburton's fortunes. In addition, he has agreed to donate the money to charity. In late September, however, the Congressional Research Service concluded that despite these measures, the paychecks represented an actual stake in Halliburton.

The web of coincident interests here is almost comical -- indeed, the most artful criticism of the Halliburton story, the one that several of its critics mention, is a joke David Letterman made on his show. The president "is asking Congress for $80 billion to help rebuild Iraq," Letterman said. "And when you make out that check, remember -- there are two L's in Halliburton." In September, the activist group American Family Voices featured Letterman's quip in an anti-Bush ad it ran in five states. Is this the image the Bush administration wants for its mission in Iraq?

There is perhaps one silver lining to Halliburton's dark deal with the government -- it has so offended lawmakers that they've decided to put an end to no-bid contracts. On Oct. 2, during its deliberations over the Iraq spending bill, the Senate passed an amendment that requires all contracts in Iraq to be awarded only after a rigorous bidding process has been conducted. The House is expected to follow suit.

Bechtel. In its long history of government work, this privately owned San Francisco firm has built some of the largest public projects in the world -- including the Hoover Dam, the subway systems in San Francisco and Washington, the tunnel under the English Channel, and many American nuclear power plants -- and, at least according to its critics, it has also built something even more valuable: close connections to the most powerful people in the country. Former Reagan administration officials Caspar Weinberger and George Shultz have worked for the firm (Shultz is still on its board). In February, the company's CEO, Riley Bechtel, was named, along with dozens of other executives, to the president's Export Council, a White House trade advisory group.

Critics charge that it was Bechtel's ties to Republicans that helped it win one of the most lucrative Iraq rebuilding contracts -- a $680 million infrastructure development grant awarded by the U.S. Agency for International Development in April. (Since then, the contract has ballooned beyond that initial sum; according to the USAID, Bechtel has so far received more than $900 million in orders through the contract.)

... In his letter to the OMB, Henry Waxman charged Bechtel with blocking Iraqi companies from participating in the rebuilding work. Waxman said that he's uncovered evidence showing that Bechtel requires local companies to carry expensive insurance plans in order to be considered fit to subcontract from Bechtel. Waxman also said that the type of contract Bechtel has with the government -- a "cost-plus" contract, in which Bechtel is paid a certain fixed fee over its costs, meaning that it's guaranteed to make money -- provides little incentive for the company to reduce costs by subcontracting to Iraqis. "It is easy to understand how this arrangement is lucrative for [Bechtel]," Waxman wrote. "But what is unclear is how these arrangements protect the interests of the U.S. taxpayer or further the goal of putting Iraqis to work rebuilding their own country."

Michael Kidder, a spokesman for the company, said that Waxman's assessment of Bechtel's work is simply incorrect. "The congressman's letter inaccurately described our method of hiring Iraqi subcontractors," Kidder said. "There is no bond industry in Iraq, but this lack of construction insurance has never prevented Bechtel from awarding any subcontracts to Iraqi firms. Following USAID's direction and their priorities, a vast majority of the subcontracting work Bechtel has awarded has gone to Iraqi subcontractors." Of the 133 subcontracts the company has awarded, 98 have gone to Iraqi firms, the company says on its Web site.

Since ... Bechtel's headquarters became a prime San Francisco protesting spot, the company has generally tried hard to counter the charge that it is profiteering from the war and that it won its contracts in Iraq through its political ties. Online, Bechtel has posted a list of "media inaccuracies" that it says the press routinely reports as fact. "Through endless repetition, rather than facts, Bechtel has gained an undeserved reputation as a secretive company that succeeds through powerful friends in high places," the site says. "Over the years, we have certainly built good relationships with important people. We network like anyone in business or the professions ... But the implication that Bechtel wins business or succeeds in a highly competitive marketplace through political connections is misguided and false."

Security guards. Iraq, as you may have heard, isn't exactly a pleasant place to do business, and when companies like Bechtel set up shop there, they're finding that thinly stretched American forces aren't always available to protect corporate interests. Instead of relying on the military for help, many companies are hiring their own protection -- elite security-service firms that provide executives with armed guards, convoys of Humvees, and all manner of amenities in order to stay alive in Baghdad. The security business is one of the few growth industries in postwar Iraq, a fact that can't be heartening to the Bush administration.

...There are at least 100 security firms working in Iraq today; most are British (Claridge says that the Brits are "regarded as the best, even by American customers") but some large American companies have won choice security contracts with the government. DynCorp, a subsidiary of CSC, an American military contractor, has been tapped to train Iraq's police force. Vinnell, a division of Northrop Grumman, is training the Iraqi army. (If you're a former Special Forces officer who can't find a job in America, you might want to consider working for Vinnell in Iraq.)

The French. On a trip to Paris in early October, Alan Larson, the undersecretary of state for economic affairs, told a business conference that the United States is quite willing to have French firms work in Iraq. "The door is open for French companies to participate in infrastructure contracts in Iraq," he said, according to AFP. "We're open to companies from all over the world regarding the rebuilding of Iraq."

... it appears that few French companies are participating in the country, and the French government ...has pledged relatively small sums for the reconstruction effort. Late in October in Madrid, the United Nations will hold a donor conference to raise money for Iraq; the U.N. wants about $35 billion, but only about $1 billion has been pledged so far. One wonders how much more money we'd have available if Donald Rumsfeld would learn to measure his words.

The Iraqis and the Americans. The question of whether Iraqis will ultimately benefit or suffer as a result of the U.S. occupation is the most important, and freighted, issue of the war, and it can't be answered here. ... At least for the next few years, until Iraq regains its oil production capacity, the country will run on U.S. dollars. And as we all share the same pool of money, our fortunes will be mutually exclusive: When the Iraqis get money, Americans will lose money, and vice versa. This situation cannot make for a fast friendship.

...Indeed, the Iraqis are already starting to lose. After the president presented his reconstruction plan to Congress, lawmakers immediately began trimming it. In the House, Bill Young, the Florida Republican who chairs the Appropriations Committee, has "scrubbed" the bill of about $1.7 billion of the president's reconstruction request. Young deleted the $50 million the administration wanted to buy cars for the Iraq's traffic police; $153 million for "solid waste management," including the purchase of 40 trash trucks; $9 million for creating ZIP codes in the country; and the $150 million to build that advanced children's hospital in Basra.

Meanwhile, in the Senate, many Democrats and some Republicans are arguing that at least some of the money the U.S. provides to Iraq should be paid back when Iraq becomes self-sustaining.... As the conservative syndicated columnist Cal Thomas wrote recently, "Why should the Iraqis complain? It's their freedom we bought. Let them help pay for it."

But the Iraqis didn't ask for the war, and they didn't volunteer to pay for it. "I'm sympathetic to the argument that it would be nice if the U.S. could get paid back some of this money," says Bathsheba Crocker, the reconstruction expert at CSIS. "But I don't think the loan is the way to do it. I'm worried about how it looks to make Iraq fairly heavily indebted to the United States. It's not something that looks all that great given the heavy degree of suspicion about what our motives are here."

In other words, we wouldn't want to be in the position of reminding the Iraqis that, when they make their checks out for the reconstruction, there are two L's in Halliburton

Wednesday, October 08, 2003

dyke to open floodgates 

From the BBC:

Greg Dyke, director general of the BBC, has announced plans to give the public full access to all the corporation's programme archives. Mr Dyke said on Sunday that everyone would in future be able to download BBC radio and TV programmes from the internet.

The service, the BBC Creative Archive, would be free and available to everyone, as long as they were not intending to use the material for commercial purposes, Mr Dyke added. "The BBC probably has the best television library in the world," said Mr Dyke, who was speaking at the Edinburgh TV Festival. "Up until now this huge resource has remained locked up, inaccessible to the public because there hasn't been an effective mechanism for distribution.

"But the digital revolution and broadband are changing all that.

Music to my ears.

Thanks to Hypergene MediaBlog. Via via Danny O'Brien

Update: Already Rupert Murdoch’s BSkyB has proposed the BBC should be forced to sell their programs to reinvest into new content.


From Radio Free Europe:

Kabul, 8 October 2003 (RFE/RL) -- Afghan Transitional Administration Chairman Hamid Karzai said today that the country's new constitution will be released to the public within 10 days.

A special Loya Jirga, or grand national assembly, is scheduled for December to approve the constitution, paving the way for presidential elections in June 2004. Karzai has already said he will stand for election.

From the PakTribune:

The United Nations, in particular the U.N. Development Program, has been actively and-to judge from the comments of interested Afghans-very usefully engaged in helping to write the Afghan constitution and create the judicial system to see that laws have meaning in a country where justice has more often been in the hands of local power brokers or religious leaders with no training in law or jurisprudence.

The steadying hand of the United Nations will be needed as Afghanistan moves toward elections. If what carries the day instead is a tendency to cave in to powerful local pressures-as the United Nations regrettably did in accepting a flawed political order in Cambodia a decade ago-the Afghan people face more instability and repression. It would not be an encouraging example for Iraq.

...Arguably no part of the population in Afghanistan has as much to gain, or lose, in this process than the women. This is why a few weeks ago, 45 Afghan women from across the country met in Kandahar-a symbolic setting because it was the spiritual base of the Taliban-to draw up their own bill of rights. They subsequently presented it to Karzai in Kabul.

Mariam Nawabi, an Afghan-American lawyer who helped the New York-based organization Women for Afghan Women organize the meeting in Kandahar, said at a recent news conference that while constitution writing may be on track, more attention needs to be paid urgently to the reform of the judicial system, or the constitution, however protective of everyone's rights, could have less meaning.

The whole article is worth reading.

From the LA Weekly:

Driving out past the Kabul airport, I see a jumble of wrecked and gutted planes heaped at the edge of the runway. I will later learn that it was American bombs that worked that particular piece of magic, but it’s my first day in Afghanistan, and I ask the driver if the jets were Russian or of some other provenance, and at what point in the last two and a half decades of warfare they came to be destroyed.

He nods, smiles, shrugs. “Yes,” he says. “They are damaged.”


From Wired News:

BOGOTA, Colombia (Reuters) - At least four people were killed and 10 injured when a suspected car bomb exploded in a commercial sector of Colombia's capital Bogota on Wednesday, the police said.

Two police officers and two civilians were killed by the explosion in the San Andresito district of Bogota, which is packed with small shops selling domestic appliances and car parts, at about 8 a.m. (9 a.m. EDT), Bogota police commander Gen. Hector Dario Castro said.

From the BBC:

Carlos Arturo Velandia, who renamed himself Felipe Torres, is a former commander in the second-largest rebel group in Colombia, the ELN, or National Liberation Army. He was due on Wednesday to leave the Itagui high-security prison near Medellin, where he had served the main part of his time in custody since being jailed in June 1994 for rebellion and terrorism. The order to grant him conditional liberty comes after the ELN called for its jailed comrades to be freed, in exchange for the release of seven foreign tourists that the rebel group is holding hostage. However, judicial authorities said Torres had been released as a result of a transparent legal process.

From the BBC:

Left-wing rebels in Colombia have killed two local mayors in the southeastern state of Cauca, reports say.
The state governor said four mayors were called to Monday's meeting by rebels from the Revolutionary Armed Forces of Colombia (FARC) in a secret mountainous hideout to explain their alleged ties to right-wing paramilitaries.

Witnesses said the mayor of Bolivar, Orlando Hoyos, was killed by the rebels as he tried to escape. They said the other three mayors fled in a vehicle, but one of them - the mayor of Santa Rosa, Jaime Jair Zambrano - was found dead a few hours later.

The commander of Colombia's armed forces, General Jorge Enrique Mora, was quoted by the Associated Press news agency as saying that Mr Zambrano was killed by members of a smaller rebel group, the National Liberation Army (ELN).

From Forbes:

BOGOTA, Colombia, Oct 8 (Reuters) - Interest rates on short-term Colombian TES T-bonds rose in an auction on Wednesday that sold the 150 billion pesos in debt on offer, the Finance Ministry said. Analysts attributed the rise to uncertainty over a national referendum on state spending cuts and political reform set for Oct. 25.

Demand for the bonds totaled 503 billion pesos. A second-round auction for 75 billion pesos was due to be held later on Wednesday.

califor - ni - a, don't fall into the sea on me - urge overkill 

Best of Luck

So we have a new Gubenator. Three cheers for Arnold. Really, good for him. I wish him the best. He has tough times ahead of him. He is facing intractable economic and budgetary issues, a state constitution that hamstrings the governor and the legislature from governing responsibly, a Democratic legislature that will surely be in a surly mood when he comes calling and the most well organized, sophisticated networks of special interest politics in any state. California needs some mending - not a big ugly campaign to derail the Gubenator.

Schwarzenegger is getting good advice in the pages on the National Review today to govern to the center and give the legslature reasons to work with him. He is also getting bad advice in those selfsame pages to remember the important role that the conservative wing of the Republican Party played in getting him where he finds himself this morning. I think its a safe bet that he takes the former. I'm not the first to say it, but governing California is going to be the antithesis of being a $20M a picture movie star with an army of people running around to serve your every whim and an even bigger army just plain kissing your ass. Let's hope he figures it out.

The big disappointment was seeing someone take over the helm of the world's 10th (8th?) largest economy with so little known about how he intends to govern. That's really painful. The blame lies squarely with Gray Davis. Given the choice between Davis, Bustamante and Schwarzenegger who can blame them. I don't blame Schwarzenegger either. He played to win and as Arnold Steinberg points out in the National Review today, "Arnold's campaign shrewdly gauged the mediocrity of the press. It gave Arnold a pass on the mistakes and contradictions of his campaign."

For a more considered opinion on how Schwarzenegger may govern go see Barry Ritholtz at the Big Picture. Special emphasis on the salutory effects that Warren Buffett may have and why.

A New Hope

There are several windfalls to the recall.

The Democratic Party is newly free of some heavy ballast and may soon shed some more.

The Party has rid itself of Gray Davis and will soon shed Cruz Bustamante. That much is obvious. Down the food chain California pol Tom Mullholland should be finding himself on the outs. Hugh Hewitt writes today in the Weekly Standard:

"California Democratic party operative Bob Mulholland, quoted in the New York Times' yesterday on Sunday's huge pro-Arnold rally: "He doesn't draw as big a crowd as Hitler did." In many ways Mulholland has been the GOP's secret weapon throughout the campaign, reliably repulsing any audience who heard him. (I featured him for weeks on my radio show for that reason, until the dim bulb in Bob's head went off and he fled the format.)"

I'd much rather see the Party schooled for its sinful ways in a state with a Democratic legislature than at the national level with a Republican one.

The real bright spot lies up the food chain. What warms the cockles of my heart is that this is another nail in the coffin of DNC Chairman Terry McAuliffe. Ah the architect of the Winter of Our Discontent. Thinking about that guy getting the boot - those cockles are actually throbbing.

Check out the trailer for the movie about Gray Davis that I'm working on through my Indian production company.

ahhh maaaa!!!! i hate those guys!! do we hafta?!! 

From Wired News:

BAGHDAD (Reuters) - Iraq's Governing Council said on Wednesday it was trying to find a compromise to end a dispute with the U.S.-led administration over the deployment of Turkish troops to help occupying forces stabilize the country.

Facing daily attacks by guerrillas and mounting financial costs in Iraq, Washington is trying to get more countries to commit troops and funds. Turkey's parliament voted on Tuesday to approve sending soldiers to join the occupation force in Iraq.

But members of the Governing Council, handpicked by Washington as the first step on the road to Iraqi self-rule, said the body had unanimously agreed to reject the presence of soldiers from any neighboring country, including Turkey. A statement from the Council's president, Iyad Allawi, acknowledged members were worried about Turkish troops on Iraqi soil but said no final decision had been made. Governing Council member Mowaffaq al-Rubaie told Reuters on Wednesday a statement would be issued soon.

On one hand, you'd like to see Bremer start backing up the Council. On the other hand, rejecting the presence of soldiers from any neighboring country is lunacy. On the other hand, the decision to have Turkish troops in Iraq seems like a really bad decision. On the other hand, a compromise might be to bar Turkish troops but allow troops from neighboring countries. On the other hand, Turkey is the only country willing to send in troops without a new resolution. On the other hand, you have to wonder what Turkey's motivations are.

Tuesday, October 07, 2003

executive compensation redux 

Remember the economist forum on executive compensation I hosted two weeks ago?

From the Wall Street Journal:

The public furor that prompted Dick Grasso's forced departure from the New York Stock Exchange in September drove home a stark point to corporate managers: Even a well-regarded chief executive officer can be sacked largely because he made too much money.

...CEOs' total direct compensation at major U.S. corporations jumped 15% to a median of $3,022,505 in 2002, according to a proxy analysis done for The Wall Street Journal by Mercer Human Resource Consulting. And compensation is expected to rise again this year, say pay consultants and attorneys who negotiate CEO contracts. Big-business bosses will benefit from a number of factors, including the economic recovery, rising share prices, fatter dividends and falling taxes.

Indeed, an early look at 2003 pay deals shows how corporate titans keep piling up the dough. The median cash bonus rose 26% to $605,000 for the heads of 69 big companies whose fiscal year ended between Jan. 1 and June 30, while the 17 of those chiefs with restricted-share grants saw the grants' median value soar 73% to $2.31 million, according to a proxy analysis set for release next week by pay consultants Equilar Inc. of San Mateo, Calif.

"CEO pay remains a wasteland that has not been reformed," contends Patrick McGurn, a senior vice president at Institutional Shareholder Services, a proxy-advisory firm in Rockville, Md.

Investors increasingly are questioning lavish compensation granted not only to weak performers but also successful CEOs.

More board members will be targets for pay squabbles -- and some may lose their seats, predicts Richard H. Koppes, a director of two public companies and former general counsel of the California Public Employees' Retirement System.

Sensitive to potential outcry, some CEOs have moderated their cash compensation -- while still amassing a huge pile of stock options. John Chambers, president and CEO of Cisco Systems Inc. in San Jose, Calif., has earned a $1 annual salary since April 2001, according to the company proxy statement released last month. And for the third year in a row, he spurned a bonus, "despite all the corporate and individual goals for the year having been met," the proxy statement says.

Yet Cisco directors granted Mr. Chambers four million options, which could be valued as much as $85.68 million, depending on the stock's future value. The CEO already holds 27.8 million exercisable options -- valued at $196.5 million at July 26, the end of its fiscal year. The latest option grants reflect "his performance and leadership with Cisco and placed a significant portion of his total compensation at risk," the proxy says.

"The compensation doesn't make a lot of sense," says Charles Elson, head of the University of Delaware business school's Weinberg Center for Corporate Governance. Mr. Chambers "has all his wealth tied up in the company. Why does he need four million more options?"

A Cisco spokeswoman says all Cisco staffers get stock options, which the company views "as a long-term, performance-based, high-risk compensation method." She notes that Mr. Chambers hasn't exercised options since February 2000.

Mr. Elson partly blames Carol Bartz, the Autodesk Inc. CEO who runs the Cisco board's compensation committee. The committee's generosity "doesn't hurt the argument she could make to her own compensation committee" for enlarged pay, he suggests. "There's a lot of potential self-interest there." Ms. Bartz declines to comment, according to the San Rafael, Calif., software maker.

There is another reason CEOs often win the pay tug-of-war: Businesses keen for fresh leadership still pay plenty to land a strong outsider. "I don't see a significant decrease in the size of the numbers in the typical package" for a newly recruited CEO, says Donald Delves, president of Delves Group, Chicago pay consultants.

...Retention worries exert an equally strong upward pull on CEO remuneration. In August, Nextel Communications Inc. signed a generous new employment agreement with its president and CEO, Tim Donahue. He joined the Reston, Va., telecommunications concern in 1996 as president and chief operating officer, advancing to CEO in 1999.

Nextel lifted his base salary by about 43% to $1 million from $700,000. Among other things, the company also sweetened his severance benefits, such as by agreeing to pay his salary for two years rather than one after he leaves.

Corporate Library, a research group in Portland, Maine, that studies corporate governance, was critical of Mr. Donahue's new package. "We've gone from good practice in terms of severance and a moderate base salary to bad practice in terms of a more typical severance package ... and a much higher base salary,'' says Paul Hodgson, senior research associate for the group.

...Oddly, corporate boards sometimes fork over bigger bucks because they don't want to alarm investors that a poorly performing leader is headed out the door. "I've told boards to pay CEOs more than justified by performance because the board told me they hadn't made up their minds whether he should go or stay," concedes Alan Johnson, managing director of Johnson & Associates, New York pay consultants.

...Many top executives think they are "so indispensable that they need outsized compensation," argues Phil Angelides, the California state treasurer and an organizer of the unprecedented public pension-fund campaign to remove the NYSE's Mr. Grasso. Will outraged institutional investors now try to topple an overpaid head of a public company? "We might," Mr. Angelides warns.

Well, in the forum we looked at numbers produced by Zimran Ahmed:

Total CEO pay in 1991 was $6B. If they were to work for free, and nothing else changed, every worker would be paid, on average, $54 more. Big whoopee. Moreover, if CEO pay is treated as a perp, it costs about $120B (at a 5% discount rate). That's $120B out of an organizational marketcap of about $9.1T. That's 1.6%. Slightly bigger whoopee.

I responded:

Zimran only looks at CEO pay. The question was about executive pay. There has to be at least five other execs at a large corporation whose pay is driven by the CEO's pay. Let's be conservative and say:

1.6% x 3 = 4.8% Not so insignificant.

I realize the $120B/1.6% number is spongier and it will exaggerate my results, but it's the only number you've given me to work with and hey, it will exaggerate my results.

...those numbers are old. Using the Merrill Lynch study cited above let's update them.

From 1991 to 2001 CEO pay grew by 473%. I don't know what the market capitalization was for 2001 was so I looked at the growth in GDP for the same period (37%) and figured that it might have grown at a similar rate. (That seemed reasonable to me, like I said, I hope someone who knows what they are doing will take a crack at this.)

$120B x 473% = $567.6B | $9.1 x 137% = $12.5T | So CEO pay represents 4.5% | 4.5% x 3 = 13.5%

In an e-mail Zimran confirmed that GDP was not a good way to extrapolate the growth of the market cap, but also conceded that he could not think of a better way. All I know is that the market cap didn't grow by no 473% from '91 to '01 and I can't imagine that it grew by 15% in '02.

In picking 3 as my multiplier to include non-CEO executives let me point out how conservative I'm being. The American Airlines scandal involved bonuses for chairman and CEO Donald J. Carty and five other senior executives which would have been equal to twice their salary. In Carty's case that would have equaled $1.6 million. What wasn't scrapped was $41 million in pension funding for 45 executives.

So let's update the numbers for last year:

$567.6B x 115% = $652.8 | $12.5T x 102.4% = 12.75T | So CEO pay represents 5.1% | 5.1% x 3 = 15.3%

4.8% in '91 and 15.3% in '02. I don't think that it's class warfare to ask if this has any economic significance. Especially when compensation experts are saying that the mechanisms for determining executive pay are not functioning well. Every economist in that forum dismissed out of hand the notion that the staggering growth in executive compensation could be a significant economic factor. I think they are wrong. I know my math is riddled with problems, but I think it gets at an important overlooked truth.

Special thanks to the friend with the WSJ subscription who e-mailed me the article.

PS: Spell check kept wanting to change Cisco Systems to Disco Systems, which was tempting.

get ready 

From the NY Times:

WASHINGTON, Oct. 7 — President Bush said today that investigators may be unable to find out who disclosed the identity of a Central Intelligence Agency officer.

"I have no idea whether we'll find out who the leaker is, partially because, in all due respect to your profession, you do a very good job of protecting the leakers," Mr. Bush told reporters after meeting with his Cabinet.

READ: I have no intention of finding the leak.

the joker 

Tacitus really stretches into the infield from first base to pick up on this one:

From the Philly Inquirer:

WASHINGTON - A majority of Americans have held at least one of three mistaken impressions about the U.S.-led war in Iraq, according to a new study released Thursday, and those misperceptions contributed to much of the popular support for the war.

The three common mistaken impressions are that:

U.S. forces found weapons of mass destruction in Iraq.

There's clear evidence that Iraqi President Saddam Hussein worked closely with the Sept. 11 terrorists.

People in foreign countries generally either backed the U.S.-led war or were evenly split between supporting and opposing it.

Overall, 60 percent of Americans held at least one of those views in polls reported between January and September by the Program on International Policy Attitudes, based at the University of Maryland in College Park, and the polling firm, Knowledge Networks based in Menlo Park, Calif.

"While we cannot assert that these misperceptions created the support for going to war with Iraq, it does appear likely that support for the war would be substantially lower if fewer members of the public had these misperceptions," said Steven Kull, who directs Maryland's program.

In fact, no weapons of mass destruction have been found in Iraq. U.S. intelligence has found no clear evidence that Saddam was working closely with al-Qaida or was involved in the Sept. 11, 2001, attacks. Gallup polls found large majorities opposed to the war in most countries.

PIPA's seven polls, which included 9,611 respondents, had a margin of error from 2 to 3.5 percent.

The analysis released Thursday also correlated the misperceptions with the primary news source of the mistaken respondents. For example, 80 percent of those who said they relied on Fox News and 71 percent of those who said they relied on CBS believed at least one of the three misperceptions.

Tacitus responded thusly:

First of all, can an impression even be mistaken? Secondly, who's to say these impressions are mistaken (if it's possible even so to be). And thirdly, I don't think an impression can be mistaken in the first place (there, I fulfilled the rule of three).

What's unfair about this study is that it tries to measure "news". But there is no news. There are just talking points in the bifurcated American body politic. There are only charges and counter charges in the dialectic of party politics. Only rhetorical weapons in the eternal dualistic struggle best conjured up by an old Star Trek episode featuring Frank Gorshin. Through it all, our only counsels are the voices in our heads.

You gotta be kiddin' me. If the American public believes falsehoods about the basic facts about what is going on the world and you are their main source of information then you aren't doing your job. Playing some Sophist bullshit to explain why people believe the untruths that are politically expedient for your politics puts you in the fast track to get pulled from my blogroll ( a big stick, I know). It's not even good sophistry. One wonders if it is supposed to be sarcasm, but the poor quality of the writing undercuts that impression.

Granted, people who want to believe those things tend to watch Fox. Those who tend to be skeptical about the Administration and about any pretext for military action tend to listen to NPR. What would be interesting would be to find out if their is an inverse: Is there something that 67% of NPR listeners falsely believe and 84% of Fox viewers correctly understand? I doubt it.

I really would like to read a few conservatives who challenge me in my thinking on things. But when I see this kind of crap I don't know where to turn.

thank frickin god 

From Newsday:

Statement by Sen. Bob Graham of Florida announcing his withdrawal from the Democratic presidential race Monday night.

Tonight I am announcing the end of my campaign for president of the United States.

Five months ago, I began this campaign with two goals.

The first was to be the next president of our nation. I felt the best prepared and most able Democratic candidate to be elected president. I have concluded that is not to be.

Note to Clark, Lieberman, Gephardt, Braun: come on in the waters fine.

what women want 

From Marketplace:

Q + A - Do women in business really want power?

Marketplace host David Brown talks with "Fortune's" assistant managing editor Beth Fenner about a surprising new survey on corporate women and the way they view power.
Reporter: Host David Brown in conversation with Beth Fenner

This should make me a lot of friends. - I'll go one better. Until women are willing to ask men out for dates, willing to be first across the couch for that first kiss, that first grope, until they are willing to put it on the line, where you are no longer flirting, when you no longer have plausible deniability, when you put what you want emotionally and sexually over the plate and put something at risk - then be prepared to be thought of as the weaker sex. After forty years of feminism, women still want men to do the heavy lifting in starting a relationship and that's chickenshit.

Monday, October 06, 2003

Bandolier, Corn, Guitar by Tina Modotti - 1927

why bush likes a bad economy 

John Kenneth Galbraith writing in the Progressive:

It may be that economic stagnation is to their taste. They don't want a new recession, obviously, and they look set to avoid that. But do they really want full employment and strong labor unions and rising wages? Probably not. The oil, mining, defense, media, and pharmaceutical firms who form the core of their constituency rely on monopoly power, patents, and the control of public resources for their profits. They do not depend, very much, on strong consumer demand.

As for the election, there are no Bush Democrats. The Nixon Democrats in the South long ago turned Republican, while the Reagan Democrats up North seem to have largely returned to the fold. (Michigan, for instance, went comfortably for Gore.) In a weaker economy, too, it may be that turnout will decline, helping Bush. The calculation is therefore plain: A strong economy won't help that much, and a weak economy won't hurt that much, either. And if it does, the effect can be drowned in a sea of grateful campaign money--or perhaps by some new national security crisis.

Stagnation, moreover, helps to justify more tax cuts. The Administration's core policy objective in this area is to shield financial wealth from all taxation. Two years ago, estate and income taxes were cut. This year, it was capital gains, dividends, and again the top tax rate. Next year, the sunset provisions in these measures will probably be removed. As things are going, quite soon, taxes will fall mainly on real estate, payrolls, and consumption. This is to say that taxes will be paid mostly by the middle class, by the working class, and by the poor. That is what the Administration wants, and what--if not defeated--it is exceedingly likely to get.

Finally, stagnation and the Bush tax policy promote rightwing plans to cut and privatize essential services, including health, education, and pensions. As financial wealth escapes tax, neither states nor cities nor the federal government can provide vital services--except by taxing sales and property at rates that will provoke tax rebellions, especially when middle class incomes are not rising. Every public service will fall between the hammer of tax cuts and the anvil of deficits in state, local, and federal budgets. The streets will be dirtier, as also the air and the water. Emergency rooms will back up even more than they have; more doctors will refuse public patients. More fire houses and swimming pools and libraries will be closed. Public universities will cost more; the public schools will lose the middle class. Eventually, federal budget deficits will collide with Social Security and Medicare, putting privatization back on the agenda.

our main enemy now is our disappointment 

From the Salt Lake Tribune:

Were Ayatollah Ruhollah Khomeini still alive, he would be seriously upset with his little grandson Hossein.

Last week in Washington, D.C., Hossein Khomeini, now 46, had few kind words for his grandfather's followers, blaming them for establishing a theocratic dictatorship in Iran and sponsoring terrorism in Iraq.

Hossein Khomeini told the American Enterprise Institute, a conservative Washington think tank, that Iran was "a huge supporter" of terrorism and that its religious leaders had betrayed the 1979 revolution that ousted Shah Mohammad Reza Pahlavi by failing to keep their promises to the Iranian people. "The goal of the revolution was the creation of democracy and freedom," he said.

From the Christian Science Monitor:

TEHRAN, IRAN – Iran's hard-line conservatives are smelling victory over the once-popular reform movement led by President Mohammad Khatami.

The Khatami era has been marred by a political civil war - as violent sometimes as it has been full of hope - in which reformers fought for the rule of law, a civil society, and the marriage of democracy and Islam. After a long struggle against hard-line conservatives unwilling to trim their absolute power, former Khatami supporters now declare bitterly: "The battle is over."

Yet, as February parliamentary elections approach, there are signs that conservatives - even as they continue to crush the reform camp - are taking on elements of the reform agenda and showing a new pragmatism.

a new hope 


the Iraqi authorities today awarded one of the first of many new re-build contracts in the telecommunications sector. In a country where half of the land lines have been severed or put out of action, the authorities have awarded operating licenses to 3 mobile carriers.

Surprisingly the contracts went to three European and Asian companies and not to the US.

Some in the US camp lobbied hard to get US Telecom carriers to be awarded the contracts, however it appears that what clinched it, is the ability to use GSM technology instead of the more antiquated CDMA.


From Josh Marshall:

All mumbo-jumbo to the contrary, the universe of possible culprits is quite small. I suspect the identity of the two is already well-known in the White House. But even if that's not the case, the president could quickly figure out who they are --- probably by demanding that they come forward, and certainly by reviewing phone logs and emails. Yet he has done neither.

We now have the farcical spectacle of the Justice Department initiating a massive investigation --- with the net thrown almost comically wide --- in order to find out what the president could find out in a few hours, tops.

That's the whole story right there.

The president has said he wants to get to the bottom of this. Yet he has done nothing to get to the bottom of it. The only credible explanation is the obvious one: that he doesn't want to get to the bottom of it.

I think that pretty much hits the hammer on the head.

i started doing the complete reverse — almost a hate card — and it caught on 

From the NY Times:

William Steig, whose insouciant cartoons of street-tough kids and squiggly drawings of satyrs, damsels, dogs and drunks delighted and challenged readers of The New Yorker for more than six decades, died Friday in Boston. He was 95.

..."He's like Thurber: he doesn't have any offspring," said Lee Lorenz, the cartoon editor of The New Yorker for many years and Mr. Steig's biographer. "His work is extremely personal."

In the mid-1930's, Mr. Steig began making "symbolic drawings," pen-and-ink works expressing states of mind. Like the poems of E. E. Cummings, they were subconscious excursions rendered on paper. When these drawings came out, nobody had seen anything quite like them.

Mr. Lorenz said cartoonists before him, like Peter Arno and George Price, would do drawings to illustrate a gag someone else had written. But Mr. Steig's humor was visual first and verbal second. Because of him, "the next generation of artists felt a freedom they never had before," Mr. Lorenz said.

Mr. Steig was also credited with changing the nature of the greeting card industry. His symbolic drawings were licensed to appear on cocktail napkins, glasses and cards. "Greeting cards used to be all sweetness and love," he once told The Hartford Courant. "I started doing the complete reverse — almost a hate card — and it caught on."

This page is powered by Blogger. Isn't yours?

Site Meter