Economic recovery in Ohio to take years, demand action by politicians, OSU report says

December 4, 12:32 PMColumbus Government ExaminerJohn Michael Spinelli

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COLUMBUS, Ohio -- Recessions from a generation ago are very different from today's Great Recession, so say a trio of researchers from The Ohio State University, who opined in their report on growth and change in Ohio that inaction by state leaders like Gov. Ted Strickland and lawmakers will only prolong what they predict is already shaping up to be a long jobless recovery.

Ohio families and communities will be further strained as the state tries to recover some of its manufacturing might lost since the 1970s, which has resulted in whole industries either never returning to their original levels of employment activity or being permanently destroyed.

If the recent past is our guide, Mark Partridge, Swank Professor of Rural-Urban Policy in the Department of Agricultural, Environmental, and Development Economics, who led the study with his two other co-authors, Xuetao Huang and Tripti Uprety, said the future economic recovery will be quite feeble, with very slow job creation. Partridge and company concluded that "this drawn out 'jobless' recovery will strain Ohioans and the communities they live in."

Previous job losses could cushion more job losses

The trio said it took 46 months for the nation to recovery from the last recession in 2001 but said Ohio's total employment never did recover. They said the damage to Ohio's manufacturing sector and the families and communities that once relied so heavily on it will have less adverse impacts now because, since 1970, the sector has been in serious decline.

Ironically, they say Ohio is much better placed to prosper in the long-run if it is able to make fundamental changes to enhance its economic potential. They warn, however, that wholesale change will require that the state let go of its traditional litany of excuses for its relative poor economic performance. Contrary to some who argue that the decline of the Detroit Three auto producers has particularly hurt Ohio over the last 40 years, the researchers show that Ohio’s so-called exposure to the auto sector is "simply not large enough to explain its poor performance."

Their research showed that Ohio’s recovery pattern tends to be more severe in downturn, and job growth tends to lag the nation in recovery. They caution that while Ohio’s job declines are still less than that in 1981-82, the labor market may need longer than 1981-82 to recover. The implications for Ohio’s businesses and governments is that it "may take many years for tax revenue to recover and for businesses to regain a good footing. "Many families will face prolonged challenges, which will spread to our broader communities," they wrote, adding, "Clearly, in going forward, Ohioans should plan on continued belt tightening."

The good, bad and ugly of "creative destruction"

The good news about the bad news about the painful loss of manufacturing jobs is that it's almost over because Ohio has lost so many manufacturing jobs that there really are not that many more to lose. "Even if Ohio were to lose every remaining manufacturing job (which it will not), there will be fewer lost jobs in manufacturing than what has occurred since the early 1970s. The upside of losing so many jobs manufacturing jobs previously is that Ohio "will be less sensitive to economic downturns than in the past due to the cyclical nature of manufacturing."

They say “creative destruction,” where the loss of declining industries frees up resources (labor and capital alike) to be employed in expanding and emerging industries by shifting resources to producing products that have higher returns increases living standards, is alive and well in Ohio.

Based on their results showing many lost jobs in Ohio will not return, their painful but sobering conclusion is that it may take many years for the "economy to return to something resembling widespread prosperity." For Ohio this means families and communities will continue to face numerous challenges for many years into the future.

As for government, they predict all levels of Ohio government "will have difficult times in balancing their budget, with resulting implications for important social services, education, and infrastructure provision." Moreover, continued shortfalls in education and infrastructure provision could "further impair future economic growth."

With manufacturing being one-third of what it was in the early 1970s, the bitter good news for Ohio is that the state may be breaking out of a pattern where its downturns are more severe than the country as a whole and its recoveries are sluggish.

Two cups of hope

The authors offer up one more cup of hope and caution for residents and political leaders. They opine that Ohio employers likely overreacted during the peak of the crisis during the winter of 2009 by laying off too many workers. Due to this overreaction, they say employers may have to re-hire workers faster to meet growing demand. But if recent trends continue, they warn again, Ohio’s labor market will be very sluggish for many years in the future.

For political leaders, they say it would be "an even bigger shame if the economic downturn further distracts Ohio’s politicians and leaders from making favorable structural changes that could avert many of these problems in the future."

The cost of inaction is that this long painful process will be followed by more painful restructuring. Happy holidays!

Follow me on Twitter @ohionewsbureau. Read more stories of Ohio people, politics and government here.

The Heartache of it All

The Heartache of it All

New Ohio Budget May Bring Faster Meltdown

by John Michael Spinelli

July 15, 2009

COLUMBUS, OHIO: Down by nearly $20 million in uncollected state revenue after ten days of political fighting between Democratic Gov. Ted Strickland and Senate Republicans, the new $50.5 billion two-year state budget seems likely to create an economic debris field in its wake if tens of thousands of jobs are cut and service reductions for those least able to fend for themselves become reality as some have said will happen. The state of the State of Ohio is a sad one indeed.

The state that once thought itself the "Heart of it All" seems better described as the "Heartache of it All," if revenues continue to decline and one-time dollars from Washington evaporate and projected revenues from slot machines don't materialize as advocates said they would. For those in the business of sewing together and supporting the social safety-net more people will need to weather the so-called Great Recession, the worst since the Great Depression of the 1930s, the good news is that they will only have to cut off their hand in stead of their arm, as they figure out how to make due with less. Doing more with less was the management mantra of former Republican Governor George V. Voinovich, now Ohio's Sr. Senator. Sayings like this may sound good in MBA classes or business school, but actually doing more with less for those who actually need more is harder to do than say.

With the spiraling of Ohio's economy downward, a situation long in the making that has accelerated and exacerbated in direct response to the sour economy afflicting virtually every state, the projected loss of possibly another 3,000 state jobs and upwards of 40,000 non-government jobs due to serious reductions in state aid to areas like libraries, food banks, early childhood learning initiatives, elderly in-home assistance, mental health and drug and alcohol addiction services and libraries, is news only the most unsympathetic and selfish would see as the kind of tough-love medicine needed to make Lazarus rise from the dead, find a job and get back to work.

Strickland can boast that his public school funding reform plan remained in the budget, an effort that if continued by future legislatures for the next decade is supposed to make Ohio's school funding plan constitutional again.

The Methodist minister who was against the sinful revenue that can only begot by slot machines before he reluctantly endorsed them as a revenue escape hatch for an economy worsening by the day due to shortfalls in revenue, is now just another gambler, hoping it hit it big. But his wager, that winnings from loosing players, many of whom will be from Ohio, will come close to the projected $933 million slots, is expected, not guaranteed. Of course, before the first dollar is lost, critics of the slot machine gambit vow to file lawsuits claiming the Governor is acting in contravention to the state constitution.

But gambling advocates who have long waited for this day to come say the approximately 17,500 slots that will be distributed to Ohio's seven horse racing tracks will fill a partial revenue hole in the $3.2 budget shortfall Strickland and lawmakers had to work out this cycle.

Ohio's take from allowing these digital bandits to set up shop like never before, made possible by the deal worked out between Strickland and Harris to legally immunize them from lossing lawsuits opponents said they will file to challenge the their constitutionality, may also disappoint as did Keno revenues. This shortfall would force Strickland to add insult to injury by reducing government workers by thousands more.

Republicans are hoping Strickland will take political flack from voters who are less forgiving about how he has handled the already declining finances and economy of the state, and more willing to pin the tail of this Democratic donkey. To help this happen, the budget hammered out between the House and Senate and sent to Strickland was opposed by 59 or the 65 Republicans in the General Assembly.

It would be a dark game to play of how bad things could be if Strickland had taken the advice of Republicans, who said he was making things worse by accepting about $7 billion in non-repeating federal stimulus dollars Ohio took from President Barack Obama and a Congress now controlled by Democrats. Budget-hole hunters found funds elsewhere, too, like the state's rainy day fund, its tobacco settlement monies and by a loan from a state program that helps local school districts finance buildings. But Republicans, nationally and locally, have come to see spending as bad, when they didn't see it as bad when the purpose of the funding was for the War in Iraq or Afghanistan or for subsidizing already well endowed stakeholders in the American system of health care, among other party goals.

And while Ohio's budget is balanced on paper, loosing lawsuits and not bringing in as much money from various sources as had been projected, all eyes on gambling specifically, are situations Strickland and Harris should not bet against but be prepared to fix when they blow a gasket.

The heartache of it all is that Ohio is undergoing a giant meltdown with very little it can do to turn the tide anytime soon. The human toll this budget has wrought has yet to be tallied. But as yet more jobs are lost even though macro statistics may show things are getting better by being less worse, a brighter future for Ohio will only arrive when we start having a heart for all.

John Michael Spinelli is a Certified Economic Development Financing Professional, business and travel writer and former credentialed Ohio Statehouse political reporter. He is registered to lobby in Ohio and is the Director of Ohio Operations for Tubular Rail Inc. Spinelli on Assignment is syndicated by Newstex.com, can be followed on Twitter @OhioNewsBureau and available for subscription to Kindle owners. To send a news tip or make comment, email ohionewsbureau@gmail.com

Time Right to Make Ohio General Assembly Part-Timers

Time Right to Make Ohio General Assembly Part-Timers

Elected Officials Should Help Bear Brunt of Balancing Budget

by John Michael Spinelli

July 7, 2009

COLUMBUS, OHIO: While Ohio Gov. Ted Strickland arm-wrestles with Senate Republicans over what combination of hurtful spending cuts or wild-card revenue generators can deliver a two-year balanced budget, one big, blatant expenditure category that could produce real savings is the sacred cow of converting the Ohio General Assembly from one of the longest sessions in the nation to a part-time avocation that could net tens of millions in cost avoidance.

As each day goes by without an agreed-upon two-year budget after July 1, the start of the new fiscal year as required by the Ohio Constitution , the meltdown in cooperation between the executive and legislative branch over what cuts in spending or proposals for new revenue will win the day will only exacerbate the already fiery contest of political wills and agendas Democrats and Republicans are now engaged in.

Current solutions to patch the projected $3.2 billion budget hole include a combination of harmful measures that either weaken the social safety net millions of Ohioans who have lost jobs of late now depend on or undercut the state's investment in education or rely upon the wishful thinking wild-card that bringing new gambling devices and operations to a state that has said no to them four times previously will be a partial revenue White Knight.

Reflecting on the menu of statewide constitutional reform issues brought to a statewide vote in 2005 by progressive groups and labor unions who thought Ohioans would approve them in response to a string of government scandals tied to Republican officeholders and their loyalists, many of whom were judged guilty by a court of law of unethical or corrupt activities, one reform item that should have been included but wasn't should have been to limit the term of the Ohio General Assembly.

While the five reform amendments went down in flames, some by staggering proportions, giving Ohio voters a chance to change how long politicians stay in Columbus, site of the Statehouse, may have been the one that could have passed had it been included. Playing on the general right-of-center gut belief that the longer elected officials are allowed to be professional politicians, the more special interest lobbyists will be able to buy laws that favor their agendas even though the public at large may be the victim of that legislation, it seems the time is right to revisit the issue of converting the virtual year long session of the legislature into a shorter, defined term that will force elected officials to prioritize and address the key issues of the day. If other states can do it, so can Ohio.

But the will of the people must be brought to bear for this to happen. That will, it seems, is no where in site despite the constant carping, bickering about government and taxes and the general contempt Ohio voters have for public officials other than the ones they vote for.

Where are the TeaBaggers and the fiscal conservatives , who generally wave their American flags and spout platitudes about the benefits of small government but who have been asleep at the switch of limiting the time their legislators can boost their pay and pension contributions, the two reasons why professional politicians will fight to stay in office.

It should come as no surprise, therefore, that Ohio legislators who are term limited to eight years in one chamber or the other are always looking for a chance to extend their terms to maybe a dozen or even more years. Their argument has been that voters can term limit any candidate by unseating them in the voting booth and that so-called "institutional knowledge," the intangible wisdom that comes from being in office for decades as was the case before term limits were approved in the early 1990s, would deliver good government because the experience accumulated over time would accrue to a legislator's understanding of various issues, giving them the perspective and wisdom to make good decisions.

Of the nation's 50 states, Ohio has long ranked as one of the top states with full-time legislatures. The cost to Ohio taxpayers, vis a vis the General Revenue Fund, for running the General Assembly, both the Ohio House and Senate, is not insignificant.

According to most recent FY 2010-2011 Redbook analysis of the executive budget proposal for each agency prepared by the Legislative Service Commission, total funding for the Ohio House of Representatives, comprised of its 99 members, 165 full-time staff and 40 pages, is $20.6 million a year or $41.2 for the biennium.

For the Ohio Senate, with its 33 members, 125 full-time staff and 40 part-time pages, total funding amounts to $12.6 million or $25.2 for the biennium.

Therefore, the combined total of our full-time professional legislature for two years is $66.4 million.

For a state whose residents historically have decried government at all levels as being too big, too costly, too intrusive in personal affairs or an obstacle to business development, it is curiously ironic that those who complain the loudest are suddenly silent to clipping the wings of the very people they charge with either playing politics or for partisan advantage or working in opposition to the what's best for the public interest.

Amid the the flame throwing over whether taxes should be increased or more cuts to government should be made, one cut that could achieve the dual goals of reducing the cost of government and forcing lawmakers to address the key issues of the day would be to send elected officials to Columbus for a limited period, to do the public's business on the key issues of the day. Afterward, they can go back home, where they can work on family or personal business without tax payers footing the bill.

But such a sane, common sense proposition seems a bridge to far for Ohioans, who will suffer the slings and arrows of outrageous politicians acting outrageously at a time when outrageous behavior is not their calling.

John Michael Spinelli is a Certified Economic Development Financing Professional, business and travel writer and former credentialed Ohio Statehouse political reporter. He is registered to lobby in Ohio and is the Director of Ohio Operations for Tubular Rail Inc. Spinelli on Assignment is syndicated by Newstex.com, can be followed on Twitter @OhioNewsBureau and available for subscription to Kindle owners. To send a news tip or make comment, email ohionewsbureau@gmail.com

Brown's IMPACT Act Included in Climate Change Bill Passed by US House

Brown's IMPACT Act Included in Climate Change Bill Passed by US House

Loan Fund for Transition to Clean Energy R&D

by John Michael Spinelli

June 26, 2009

COLUMBUS, OHIO: Ohio's junior Sen. Sherrod Brown had something to crow about Friday, when the US House of Representatives included his bill to establish a $30 billion loan fund to help manufacturers transition to a clean energy economy in a climate change bill that squeaked to passage with only 7 votes.

Even though the battle to address issues related to global warming claimed 44 Democratic defectors, Brown rallied around the work of two Ohio congressmen, who he said fought to include his bill designed to help small and medium-sized manufacturers across the nation adapt to the clean energy economy by providing them with much-needed access to credit.

But another Ohio congressman, John Boehner, the Minority Leader, used his privilege as a party leader to stall the vote, according to one published report that said he consumed just over an hour by reading from a 300-page amendment added in the early hours of Friday.

Boehner and other Republicans have framed the bill as a "tax" that would lead to more job losses and to problems in the voting booth for those members who voted for it. Only eight Republicans crossed over to vote for it.

The goal of this bill is to reduce greenhouse gases in the United States to 17 percent below 2005 levels by 2020, and 83 percent by midcentury.

All Ohio's Democratic Congressmen, with the exception of Dennis Kucinich of Cleveland and Charlie Wilson from the southeast, voted for it, while Ohio Republicans voted against it as a block. Ohio currently has 18 Congressional districts, although speculation has it that the next Census will reduce this number by 2 seats.

"Our nation's traditional manufacturing industry, which helped build our nation's middle class and is critical to national security, currently faces significant challenges," Brown said in a prepared statement.

Elected in 2006 when Democrats reclaimed many offices formerly long-held by Republicans, Brown, whose gravely voice and perennially musted-up hair contribute to his trademark style, applauded Ohio Congressmen John A. Boccieri (OH-16) and Zack Space (OH-18), both Democrats, for working to include his IMPACT Act [Investments for Manufacturing Progress and Clean Technology] in the American Clean Energy and Security Act of 2009.

The bill, the heart of which is about a "cap-and-trade" system some say will lead to big changes, both positive and negative, in sectors like election power generation, agriculture, manufacturing and construction. legislation, offers opportunities to use energy better or retool for a new era of jobs realted to clean energy.

Motivated in great measure by the loss of hundreds of thousands of manufacturing jobs in Ohio, where the demise of the US auto industry as tracked by Chrysler and General Motors going in and out of bankruptcy court where they will be reshaped and reformed, Brown hopes his loan fund will help domestic manufacturers recover from the 30 percent slide since 1987 their sector has had on the nation's gross domestic product or GDP.

The manufacturing sector, which according to Brown is responsible for America's great middle class and that accounts for 12 percent or $1.6 trillion of GDP and nearly three-fourths of the nation's research and development, needs access to credit so they can become a part of and not a victim to the rise of clean energy jobs. The National Association of Manufacturers opposed the bill.

He noted that passage of the climate change bill confirms that clean energy legislation is an opportunity for Ohio manufacturing. "By creating a funding source to help Ohio manufacturers retool, we can revive Ohio manufacturing through investments in clean energy," a move he said will "go a long way toward making Ohio the Silicon Valley of clean energy manufacturing.”

Boccieri, a veteran of the war in Iraq who was elected last year, said, “This legislation represents the next step toward freeing our nation from its dependence on foreign resources and it will help fuel our economic recovery.” He said the bill is about "creating jobs right here at home that cannot be outsourced, protecting our national security, and helping our manufacturers retool to thrive in a new green economy."

The impact of IMPACT is that it will allow small and medium-sized manufacturers to improve energy efficiency, retool for the clean energy industry, and expand the nation’s clean energy manufacturing operations.

In his release today, Brown said the current economic crisis has exacerbated existing problems within the U.S. manufacturing industry, and taht manufacturers continue to face a reduction in demand and a lack of capital.

He cited a survey done in May that found that more than 70 percent of manufacturers anticipate difficulties securing credit to purchase raw material and rehire workers as business conditions improve. For the past 16 consecutive months, U.S. manufacturing has contracted. Moreover, Brown noted, according to the Federal Reserve Board, manufacturing output fell 2.7 percent in January 2009 to a level 13.1 percent below that of only 12 months earlier. And just last month, nearly half of the nation’s job losses were tied to manufacturing.

John Michael Spinelli is a Certified Economic Development Financing Professional, business and travel writer and former credentialed Ohio Statehouse political reporter. He is registered to lobby in Ohio and is the Director of Ohio Operations for Tubular Rail Inc. Spinelli on Assignment is syndicated by Newstex.com, can be followed on Twitter @OhioNewsBureau and available for subscription to Kindle owners. To send a news tip or make comment, email ohionewsbureau@gmail.com

Happy Days Are (Still) Not Here Again

Happy Days Are (Still) Not Here Again

Ohio Among 10 Lowest States on U.S. Well-Being Index

by John Michael Spinelli

May 13, 2009

COLUMBUS, OHIO: Only Mississippi, Kentucky and West Virginia ranked lower than Ohio on a national well-being index that not only considered absence of infirmity and disease but also a state of physical, mental and social well-being.

Performed by the Gallup-Healthways Well-Being Index, the first and largest survey of its kind, with 1,000 calls a day, seven days a week, Ohio ranked 47th among the nation's 50 states on six sub-indices including life evaluation, emotional health, physical health, healthy behavior, work environment and basic access.

The top 10 states ranged from #1 Utah to #10 Arizona. The report showed a clear pattern of higher well-being states located primarily in the West and lower well-being states in the Midwest and the South.

The Web site of The Gallup-Healthways Well-Being Index™, an alliance with America's Health Insurance Plans, says it has been developed to "provide the official measure for health and well-being. It's the voice of Americans and the most ambitious effort ever undertaken to measure what people believe constitutes a good life."

Of Ohio's 18 Congressional Districts, District #08 (John Boehner,R), #12 (Pat Tiberi, R) and #14 (Steve LaTourette, R)ranked in the middle 20 percent.

Districts one level down from the middle 20 percent were #05 (Bob Latta, R), #16 John Boccieri, D), #15 (Mary Jane Kilroy, D) and #02 (Jean Schmidt, R)).

At the bottom were #09 (Marcy Kaptur, D), #13 (Betty Sutton, D), #10 (Dennis Kucinich, D), #11 (Marcia Fudge, D), #17 (Tim Ryan, D), #04 (Jim Jordan, R), #18 (Zack Space, D), #06 (Charlie Wilson,D), #07 (Steve Austria, R), #03 (Mike Turner, R), and #01 (Steve Driehaus, D).

But are these rankings any wonder, given the loss of 269,000 more jobs in the past 15 months, which has produced the highest unemployment rate in 25 years (9.7%)? With more than one in 10 Ohioans receiving food stamps and with more than one-third of Ohio's schoolchildren now qualifying for the federal lunch program and Ohio's food pantries with more hungry mouths than they have food to feed, the well-being of Ohioans is in deep trouble.

Coinciding with this gloomy news were reports that seven companies in business in Ohio plan to eliminate another 2,300 jobs at plants in more than a dozen locations. Moribund auto sales were credited for the job losses.

Keith Ewald of the Ohio Bureau of Labor Market Information said in a published report the number of unemployed Ohioans is now 577,500, up nearly 200,000 from a year ago.

Ewald, who said the "job market will likely be one of the last parts of the economy to recover," was joined in his dark prognostication by James Newton, chief economic adviser for Commerce National Bank in Columbus, who said, "Job markets are going to be horrible for quite some time."

John Michael Spinelli is a Certified Economic Development Financing Professional, business and travel writer and former credentialed Ohio Statehouse political reporter. He is registered to lobby in Ohio and is the Director of Ohio Operations for Tubular Rail Inc. To send a tip or comment, email ohionewsbureau@gmail.com

Ho Ho Ho Help

Ho Ho Ho Help

Detroit Big Three, UAW Prepare for Bad Tidings

OhioNewsBureau

with John Michael Spinelli

Columbus, Ohio: Detroit's Big Three automakers and the United Auto Workers union may wake up Christmas morning to find nothing under their tree, if congressional Republicans and their lame duck president stand tough and not throw good money after bad by letting General Motors, Ford and Chrysler fall into bankruptcy, a scenario expert witnesses who also testified Friday said was not in the best interest of the nation.

The leaders of the Big Three car-makers, who this week drove to Washington in their most fuel efficient vehicles instead of flying there by fossil-fueled corporate jets as they did last week, did double duty by repeating their talking points, with hat in hand and a big tin cup, to the Senate and House. The three car stewards from Detroit asked lawmakers for about $34 billion. This amount, nine billion more than the troika said they needed last week, would be enough cash to get them past Christmas and maybe to March, when a new Democratic president and a stronger Democratic congress will do for them what President Bush and many of his party's fiscal conservatives won't do now, namely, keep about three million workers from joining the 1.9 million workers who have already lost their jobs this year.

But by Friday evening Democratic leaders, including Senate Majority Leader Harry Reid of Nevada, House Speaker Nancy Pelosi of San Francisco, Sen. Chris Dodd of Connecticut and Rep. Barney Frank of Massachusetts, agreed that a "rescue loan" to the nation's struggling domestic automakers was essential. Their decision came as The US Bureau of Labor Statistics greeted the nation with employment statistics that assured about 533 thousand workers will not have the same Christmas those with a job will have. The job loss number was powerful. It cast the recession economists now say started nearly a year ago in December as the longest one since the Great Depression. Today's BLS numbers are equivalent to tossing the entire state of Wyoming or the City of Seattle out of work. In November alone, the manufacturing industry lost 85,000 jobs, 82,000 thousand in construction and 91,000 thousand in retail. BLS officials said it was the worst report in three decades.

President Bush said he didn't want to redirect any of the $700 billion congress approved to bail out a sluggish, over-leveraged Wall Street to help the domestic automakers stay out of bankruptcy reorganization known as Chapter 11. The sentiment offered by Mr. Bush and fellow Republicans -- that throwing money at companies that may not survive -- were echoed by Mark Sanford, the governor of South Carolina. He said bankruptcy was the only way to "break certain relationships...like labor contracts" and believes Washington has provided enough stimulus already. He said $ 7 trillion in stimulus already is enough and Washington printing more money can't continue. He defined Detroit's situation as a problem of too much debt, the declining value of the dollar and not working hard enough in a market based economy to get rewarded. But foreign car companies, some in Republican districts, were hurting, too, as seen by a 50 percent downturn in Toyota stock. A fall off in car sales is no doubt linked to Americans who don't have cash or cannot get credit to buy one, or who don't have a job anymore.

One Ohio senator, Sherrod Brown, who sits on the Senate Banking Committee chaired by Chris Dodd, said constituents in his state, where total auto-related employment is about 250,000, are worried they won['t have a job next year. "It's all about manufacturing, making things," she said, adding, "America has a middle class because we make things and export them." Brown, elected senator in 2006, said US trade policies need to be changed, a hope that may come true when his party's new president-elect, Barack Obama, comes to power in January along with a more powerful Democratic caucus in both legislative chambers. Putting people to work is as paramount for Brown, who said no one wants to "play a game of chicken" and political posturing at this time is unnecessary, as it is for Obama, who used his Saturday video to outline a massive infrastructure spending program he'll launch upon being sworn in president.

"I didn't want to vote for money for Wall Street or car makers, but I have to," Brown said, noting that no questions were asked of Wall Street bankers as they are now for Detroit carmakers and workers. "There's a class difference here; people working with their hands...AIG workers make multiples of what autoworkers make," he said in his signature gravely voice. "It's not a pretty sight," Brown said to Rachel Maddow of MSNBC.

House Banking Committee chairman Barney Frank, a Democratic leader who has called on president-elect Obama to get involved now in advance of his January 20 swearing in ceremonies, said the new deal is to loan Detroit's Big Three $25 billion in already approved energy funds, but reserve the right next year to use Wall Street money. Frank said no questions were asked of the big insurance giant AIG, whose leaders and workers make far more than their peers in Detroit. Frank also said the situation calls even more attention to solving America's health care problem, which places a financial burden on the automakers that in turn makes them less competitive than their foreign car rivals, whose government have universal health care. Lack of universal health coverage underscores the "stupidity of America's health policy" he said, noting that Detroit and other business would be better off in two years, after President Obama and Congress work toward a "rational health care plan." Frank, like other Democrats, said there is a distinct bias between blue collar and white collar jobs. One industry observer said people who "shower before work" are given carte blanch while people who "shower after work" are given the third degree.

News came a day later that the size of the bailout may be half what automakers had asked for.

After the car CEOs left he hearing room, a panel of other economic experts chimed in, saying Detroit could not be allowed to go bankrupt or out of business. Felix Rohatyn, a legendary financier who helped bring New York back from the edge during the 1970s, said lawmakers need to hurry up before it's too late. "From a popular point of view, it's difficult, but from a practical point, its' very doable," he said of the rescue loan.

David Friedman of the Union of Concerned Scientists Clean Vehicles Research Center said the rescue package should be structured as investment, not bailout. He said Detroit's survival depends on it, that taxpayers should get a return on their investment, that carmakers should drop their lawsuits to keep increased mileage standards imposed by California should be dropped and new cars should be made to produce cleaner cars and trucks.

Jeffrey Sachs of the Earth Institute at Columbia University said Detroit should not reorganize in Chapter 11. Sachs told lawmakers that Federal Reserve Chairman Ben Bernanke and Treasury Chairman Henry Paulson should both be more involved than they are. He called on Detroit to be pragmatic, restructure their balance sheets and models. "The double standard with Wall Street is painful and palpable and difficult to understand," he said. Sachs said if Detroit gets no help soon, they could meltdown by Christmas. "Unless they are driven to bankruptcy, ,they will survive and prosper," Sachs said.

But a witness like Edward Altman, a professor of finance at Columbia University, said just the opposite. He said the only hope Detroit has is to go bankrupt, where they can restructure and change their management.

One committee member, Al Green, a Democrat, took a pop quiz of the witnesses. He first asked them if the bailout of Wall Street was in America's best interest. All hands went up. He then asked if it was in America's best interest to help Detroit. Again, all hands went up. Pennsylvania Senator Bob Casey took on critics of auto union workers. He debunked the so-called “mythology” that auto workers make $70-an-hour as “scapegoating” and “garbage." According to the New York Times, the average U.A.W. member costs GM about $74 an hour in a combination of wages, health care and the value of future benefits, like pensions. By contrast Toyota spends the equivalent of about $45 an hour for each of its employees in the United States. Base wages between the Big Three and the foreign companies are roughly comparable, with a veteran U.A.W. member earning $28 an hour at the Big Three compared to about $25 an hour at Toyota’s plant in Georgetown, Ky. (Toyota pays less at its other American factories.)

Senator Dodd is echoing the notion expressed here that Detroit should also manufacture mass transit vehicles, an idea one commenter said others dealt with "respectfully."

Michigan Governor Jennifer Grandholm, whose state unemployment figure is within spitting distance of double digits, said access to credit is what's stopping people from buying cars. She said 1 in ever 10 jobs in the nation are tied in one way or another to car makers, and that for reasons of energy independence and economic security, Detroit must not allowed to fail. Meeting with the nation's governors in Philadelphia, where they asked president-elect Obama to ride to their rescue next year, Grandholm, who said her state was the poster child of the sagging economy, said no one wants people living on a "safety net system." She implored that people be given a chance at dignity, retrained in innovative ways instead of the slash and burn philosophy of Mr. Bush and others, like Alabama Senator Shelby who told the car makers he doesn't want to fund them. She said not giving people a second chance "is not American."

John Michael Spinelli is a former Ohio Statehouse government and political reporter and business columnist. To send a tip of comment, email ohionewsbureau@gmail.com

Obama, Biden Inoculate Against "Washingtonitis"

Obama, Biden Inoculate Against "Washingtonitis"

Strickland, Govs Ask for Help

OhioNewsBureau

with John Michael Spinelli

Columbus, Ohio: With nearly a month passing since the 2008 Democratic ticket was elected to bring change to the White House and still another six weeks to go until they are sworn in as President and Vice President, President-elect Barack Obama and Vice-President-elect JoeBiden told a national meeting of governors in Philadelphia, PA, today that fresh thinking and ideas that work will both have their ears and inoculate their administration from the kind of ideological group-think that leads to an insularity of thinking they dubbed "Washingtonitis."

Noting that 41 states face budget shortfalls, made more egregious by constitutions that mandate a balanced budget, Obama said Washington under his leadership will act swiftly to pass an economic recovery plan that will help Wall Street and Main Street pull out of the economic dire straights bearing down on the nation.

Reiterating again what he so often said on the campaign trail, Obama said his recovery plan will include needed middle-class tax cuts along with "down payments on critical investments" like infrastructure projects that can sustain long-term growth and "pull us out of our current economic slump."

He said change needs to come not just from Washington, but from everyone, including members of the loyal opposition, who he extended a hand of friendship to and said would have his ear if their ideas are good and workable.

"Show me what works and you'll have my ear," he told the assembled governors, most of whom are fighting imploding budgets, job losses, home foreclosures and a general malaise that has sapped spirits as they watch their stocks and retirement funds erase gains made over the last decade. He said he and his running mate would not be "hampered by ideology" as they seek a plan for recovery.

He told the governors that he not only expects them to implement programs emanating from Washington, but to "help draft and shape them" too, then spend funds well.

Obama said there will be "hard choices about how to invest tax dollars" that may not always be popular, but everyone working together, a strategy he said had been important and effective in his own career, would prevent him and his administration from being infected with "Washingtonitis" or the inability to see the world from a perspective other than from within a small group of advisers.

Noting who his audience was, Obama quoted Supreme Court Judge Brandeis, saying that states can be laboratories to test out what works and what doesn't so Washington can observe and act accordingly.

Among the governors in Philadelphia today was Ohio Gov. Ted Strickland, who yesterday said state finances are worsening and told Ohioans that more budget cuts are coming, which could mean reduced funding or program services for his constituents.

Vice President-elect Joe Biden, a long-standing rider of the rails, said America needs to up its investment in infrastructure, now a dismal 1 percent of GDP, to levels approaching those of China, where levels of 7 percent of GDP are common.

Joe the rail passenger pointed to the China Olympics as an example of the value of funding infrastructure, making special note of theMagLev rail line that whisks passengers along at speeds of 200-miles-per-hour or more.

In his letter to the two future leaders of the nation, Ohio Gov. Strickland asked for a financial package composed of state block grants and help for needy families among other concerns.

For purely political reasons, Strickland has refused to mouth the words "increased taxes" for fear Republicans will use it to defeat him in 2010 as just another liberal, tax and spend Democrat who says one thing and does another. By refusing so far to consider tax increases, Strickland has neutered Republicans who desperately want to tag him as a tax raiser.

When Republicans controlled state government from the governor's mansion to both chambers of the legislature for nearly 16 years, they passed a five-year tax reduction program in 2005 that has reduced revenue to state coffers at a time when those revenues are needed. Republican leaders at the time said Ohio's tax plan would be the envy of the nation.

John Michael Spinelli is a former Ohio Statehouse government and political reporter and business columnist. To send a tip of comment, email ohionewsbureau@gmail.com