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Mass outreach to build March 21 Demonstration:
San Francisco -- 415-821-6545:
Saturday, March 7 and March 14:
12:00 Noon, meet at 2489 Mission St. #24 at 21st St.
East Bay -- 510-435-0844:
Saturday, March 7 and March 15, 10:00 A.M.
meet at MacArthur BART main entrance, Oakland
Posters, flyers and stickers are available at the ANSWER office.
Call 415-821-6545 for convenient pick-up times. All are encouraged
to view outreach and talking to your neighbors as crucial
to building this action.
NEXT MARCH 21 COALITION PLANNING MEETING:
SUNDAY, MARCH 15, 4:00 P.M.
CENTRO DEL PUEBLO (UPSTAIRS)
474 VALENCIA STREET (NEAR 16TH STREET)
SAN FRANCISCO
Check out the new MARCH 21 Coalition Website
(An extensive endorsement list is posted here):
http://www.pephost.org/site/PageServer?pagename=M21_homepage
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Winter Soldier: Testimony from US veterans on their experiences in Iraq, women's experiences, being a Muslim in the US military, war resisters and more.
Wed., March 11, 6 - 9 PM
150 Goldman School of Public Policy on UC Berkeley campus
Free.
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March against the war on March 21
Dear friends,
During his presidential campaign, Obama's popularity surged with the promise that he would bring the troops home from Iraq within 16 months. But his recently announced plan would continue the illegal occupation indefinitely. It would leave up to 50,000 troops in that war-torn country for who knows how many years. And it would delay the withdrawal of the first batch of troops to 19 months.
"When President Obama said we were going to get out within 16 months, some people heard, 'get out,' and everyone's gone. But that is not going to happen," said a senior military officer.
This plan doesn't "leave Iraq to its people and responsibly end this war", as Obama claimed during his Congressional address of Feb. 24. Instead it entrenches the U.S. in a brutal counter-insurgency war that helped to bankrupt our country and sends an endless stream of Americans to continue dying and killing.
The U.S. government, the American people, and the Iraqi people need to hear our voices of opposition on March 21.
Last week, Sec. of Defense Gates and President Obama announced their plan to deploy an additional 17,000 troops to Afghanistan - that's a 50 percent increase - despite the fact that the Department of Defense has no exit strategy. And the U.S. is expanding the covert war run by the CIA inside neighboring Pakistan.
We cannot afford another quagmire.
Please join us in Washington, SF, and LA on March 21.
Go to www.pentagonmarch.org for more information
Meanwhile the U.S.-funded occupation and blockade of Gaza continues after an assault in which 100's of civilians were killed and even a United Nations school was not spared from the onslaught of human rights crimes and violations of international law.
The people of Iraq, Afghanistan, Pakistan and Palestine are struggling to rid themselves of deadly, racist occupations. We need to unite in the realization that the movement in solidarity with the people of Palestine is the same as the movements in solidarity with the people of Iraq and Afghanistan. Let us stand together with each other and with them, and say:
Iraq, Afghanistan, Palestine, occupation is a crime!
The people of the world need to hear from Americans that we are against the racist U.S. wars of aggression and occupation. We have an historic responsibility to raise our voices and be heard, to march with our banners held high and be seen, demanding
Bring ALL the troops home NOW!
Money for jobs and education, not for war and occupation!
End U.S. support for the occupation of Palestine!
No war on Iran or Pakistan!
The National Assembly to End the Iraq and Afghanistan Wars and Occupations is joining with a broadening alliance of 100's of coalitions, organizations, and networks in a united MARCH 21 NATIONAL COALITION to mobilize people across the United States to take part in a March on the Pentagon on the sixth year of the military invasion and occupation of the Iraq War: Saturday, March 21.
Demonstrations will also be held on that date in San Francisco, Los Angeles, and other cities across the U.S.
For updated information about buses and the national March 21 coalition, which includes labor unions, peace and anti-war groups, veterans and community groups and more, see: www.pentagonmarch.org
These actions will remind the nation and the world that the U.S. antiwar movement - marching behind a banner demanding "Out Now!' - will intensify its struggle to stop the wars.
The actions are needed to assure the people of Iraq, Afghanistan, Palestine, and other countries threatened by Washington's expansionist policies that tens of millions of people in this country support their right to settle their own destinies without U.S. interventions, occupations and murderous wars. International law recognizes - and we demand - that the U.S. respect the right to self-determination. We reject any notion that the U.S. is the world's self-appointed cop.
The March 21 united mass actions are also needed at this time of economic meltdown to demand jobs for all; a moratorium on foreclosures; rebuilding the crumbling infrastructure; guaranteed, quality health care for all; an end to the ICE raids and deportations; and funding for sorely needed social programs. So long as trillions of dollars continue to be spent on wars, occupations, and bailouts to the banks and corporate elite, the domestic needs of the people of the U.S. can never be met.
For more information about the National Assembly please visit: www.natassembly.org
March 21, in D.C., will culminate in a dramatic direct action where hundreds of coffins-representing the multinational victims of militarism, Empire and corporate greed-will be carried and delivered to the headquarters of the Corporate War Profiteers and Merchants of Death.
From the Pentagon, we will march to the nearby giant corporate offices of Boeing Company, Lockheed Martin Corporation, General Dynamics and KBR (the former subsidiary of Halliburton).
A March 21 Labor Rally and contingent to March 21
will be held in the grassy area just South of Market
Street in Justin Herman Plaza
Saturday, March 21
Rally at 10:30 a.m. // Form contingent to march at 11:45 a.m.
http://uslaboragainstwar.org/article.php?id=18479
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Donate to Courage to Resist
A message from Army Spc. Agustín Aguayo,
Iraq War veteran and war resister
Since the day I surrendered to military custody after refusing to return to Iraq, Courage to Resist has been there for me and my family as a constant fountain of support. This support has come in many forms, from a friendly call, to organizing a campaign to cover my legal expenses and basic needs. I believe only an organization with altruistic motives that truly cares would have done this. As someone who has felt the enormous relief of having a strong support group behind me, it is a privilege now as a member of Courage to Resist to help others as I have been helped.
http://www.couragetoresist.org/x/content/view/21/26/
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Wake Up, Freak Out - then Get a Grip from Leo Murray on Vimeo.
http://www.wakeupfreakout.org/film/tipping.html
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ARTICLES IN FULL:
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1) New Owners to Reopen Window Plant, Site of a Sit-In in Chicago
By KAREN ANN CULLOTTA
February 27, 2009
http://www.nytimes.com/2009/02/27/us/27factory.html?ref=us
2) 70 Youths Sue Former Judges in Detention Kickback Case
By IAN URBINA
February 27, 2009
http://www.nytimes.com/2009/02/27/us/27judges.html?ref=us
3) As Livelihoods End, Bowed but Proud
By KEVIN COYNE
Jersey | Florence
February 22, 2009
http://www.nytimes.com/2009/02/22/nyregion/new-jersey/22colnj.html?ref=nyregion
4) Even Worse for Young Workers
By BOB HERBERT
Op-Ed Columnist
February 28, 2009
http://www.nytimes.com/2009/02/28/opinion/28herbert.html
5) A Clean Fight
By TIMOTHY HSIA
Op-Ed Contributor
February 28, 2009
http://www.nytimes.com/2009/02/28/opinion/28hsia.html/
6) Forced From Executive Pay to Hourly Wage
By MICHAEL LUO
March 1, 2009
http://www.nytimes.com/2009/03/01/us/01survival.html?hp
7) Guess What Got Lost in the Loan Pool?
By GRETCHEN MORGENSON
Fair Game
March 1, 2009
http://www.nytimes.com/2009/03/01/business/01gret.html?ref=business
8) Video of Police Beating [of 15-year-old girl in police custody]
Released in Washington State
By Robert Mackey
http://www.youtube.com/watch?v=ipb_PeXOdT4
http://thelede.blogs.nytimes.com/2009/03/02/video-of-police-beating-released-in-washington/
9) Ukraine Teeters as Citizens Blame Banks and Government
By CLIFFORD J. LEVY
March 2, 2009
http://www.nytimes.com/2009/03/02/world/europe/02ukraine.html?ref=world
10) U.S. Missiles Hit Militants in Pakistan, Killing Eight
By PIR ZUBAIR SHAH
March 2, 2009
http://www.nytimes.com/2009/03/02/world/asia/02pstan.html?ref=world
11) A.I.G. Reports Loss of $61.7 Billion as U.S. Gives More Aid
By ANDREW ROSS SORKIN and MARY WILLIAMS WALSH
March 3, 2009
http://www.nytimes.com/2009/03/03/business/03aig.html?ref=business
12) Wars, Endless Wars
By BOB HERBERT March 3, 2009
Op-Ed Columnist
http://www.nytimes.com/2009/03/03/opinion/03herbert.html
13) Tenants Wary of Clustering of Homeless
By JULIE BOSMAN
March 4, 2009
http://www.nytimes.com/2009/03/04/nyregion/04homeless.html?hp
14) Armenia: Falling Currency Leads to Run on Stores
By THE ASSOCIATED PRESS
World Briefing | Europe
March 4, 2009
http://www.nytimes.com/2009/03/04/world/europe/04briefs-FALLINGCURRE_BRF.html?ref=world
15) Ex-Leaders of Countrywide Profit From Bad Loans
By ERIC LIPTON
March 4, 2009
http://www.nytimes.com/2009/03/04/business/04penny.html?ref=us
16) Job Losses Accelerated in February, Index Indicates
By REUTERS
March 5, 2009
http://www.nytimes.com/2009/03/05/business/economy/05econ.html?ref=business
17) A.F.L.-C.I.O. to Support Nationalizing Banks
By STEVEN GREENHOUSE
March 4, 2009
http://www.nytimes.com/2009/03/04/business/04private.html?ref=business
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1) New Owners to Reopen Window Plant, Site of a Sit-In in Chicago
By KAREN ANN CULLOTTA
February 27, 2009
http://www.nytimes.com/2009/02/27/us/27factory.html?ref=us
CHICAGO - The 250 workers who staged a December sit-in at a Chicago window factory to protest losing their jobs were celebrating Thursday, after another window manufacturer announced plans to reopen the plant and start hiring back the displaced workers within months.
The sale of what had been Republic Windows and Doors to a California company, Serious Materials, for $1.45 million, was completed in bankruptcy court this week, with company officials promising United Electrical Workers Local 1110 to rehire all the laid-off workers at their former rate of pay.
"We see this opportunity to expand our operations in direct relation to the stimulus package, which includes the greening of federal buildings and the weatherization assistance program," said Sandra Vaughan, the chief marketing officer for Serious Materials, which also manufactures energy-efficient windows and building products in Boulder, Colo., and Vandergrift, Pa.
Ms. Vaughan said it could take months to get the company's equipment up and running in Chicago, but to former Republic Windows workers like Armando Robles, a father of five who lost his health insurance in January, the prospect of the factory's reopening was "a dream come true."
"They are promising to hire all of us back sooner or later, but they will start with a small crew," said Mr. Robles, 39, who had been a maintenance technician. "Having another company reopen the factory was always our hope when we occupied the factory in December."
Serious Materials' acquisition of the 125,000-square-foot warehouse that housed Republic Windows comes just days after Republic Windows' former owner, Rich Gillman, ceased operations at his new window plant in Red Oak, Iowa. Mr. Gillman opened that factory late last year as a nonunion plant, after abruptly shuttering the one in Chicago.
"We are sad that the inability to make the company succeed represents a loss for more than 100 workers and their families, and investors who held great hope for this enterprise," Mr. Gillman said in a statement.
Melvin Maclin, 55, a former technician at Republic Windows, said his bitter emotions of the last few months turned to joy this week, after learning that he could soon be back at work, cutting designs into glass windows at the Chicago plant.
"When I got the phone call, I woke up my wife, and we did a little victory dance," Mr. Maclin said. "This is not only a victory for the Republic workers, but for laborers and unions everywhere."
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2) 70 Youths Sue Former Judges in Detention Kickback Case
By IAN URBINA
February 27, 2009
http://www.nytimes.com/2009/02/27/us/27judges.html?ref=us
More than 70 juveniles and their families filed a class-action lawsuit Thursday against two former judges who pleaded guilty this month in a scheme that involved their taking kickbacks to put young offenders in privately run detention centers.
The suit contends that before resigning last year, the judges "used kids as commodities that could be traded for cash," placing an "indelible stain" on the juvenile justice system of Luzerne County in northeastern Pennsylvania.
The suit, filed in the Federal District Court in Scranton by the Juvenile Law Center, seeks to have all profits that the detention centers earned from the scheme placed in a fund that would compensate the youths for their emotional distress.
In an earlier filing, the law center, based in Philadelphia, asked the State Supreme Court to clear the records of all juveniles who appeared before the judges, Mark A. Ciavarella Jr. and Michael T. Conahan.
The suit brought Thursday is the third filed on behalf of juvenile offenders. The two others, one of which also seeks class-action status, were filed by private lawyers.
Mr. Ciavarella and Mr. Conahan pleaded guilty on Feb. 12 to federal charges of wire and income-tax fraud for having taken more than $2.6 million in kickbacks to send teenagers to the two privately operated centers, run by PA Child Care and a sister company, Western PA Child Care.
"Judge Ciavarella's placement of so many children in juvenile facilities without regard for their underlying charges suggests a Procrustean scheme that violated one of the core principles of the juvenile justice system - the right to individualized treatment and rehabilitation," Lourdes M. Rosado, associate director of the Juvenile Law Center, said in a statement.
Lawyers for the two former judges declined to comment on the suit.
As for the criminal investigation of court personnel, two additional people have already been charged, and federal officials say they may soon charge others involved in the scheme.
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3) As Livelihoods End, Bowed but Proud
By KEVIN COYNE
Jersey | Florence
February 22, 2009
http://www.nytimes.com/2009/02/22/nyregion/new-jersey/22colnj.html?ref=nyregion
Florence
ON his last day of work at the sprawling riverfront foundry here, Tom Darmo looked up from the stacks of pipes he was counting and decided that, after 22 years, the time had come for him to visit the one spot where he had never set foot before: the peak of the cupola, the five-story furnace where scrap metal was melted and transformed into something new.
The cupola is the highest point at Griffin Pipe, and on this last morning before the plant's closing it was probably the coldest, too. Winds were gusting near 50 miles an hour, whipping up whitecaps on the gray Delaware. Mr. Darmo, 42, tightened the band inside his hard hat and, with three colleagues from the quality control department, started climbing the narrow ladders toward the uppermost catwalk.
"It was like us going to Mount Everest," he said later, after he and roughly 200 other workers had left their old jobs for the last time. "I've looked at it from afar for many years, but I've never been up to the top. I will never forget that. It was a special time for us."
He could see everything from up on the cupola, more than 200 acres of a foundry whose roots were more than 200 years deep, a place most people around here presumed was too old and too big to ever close. "The First Company to Manufacture Cast Iron Pipe in the United States," the sign out front declares; before it was bought by Griffin Pipe in 1962, it was the R. D. Wood Company, which was founded in Millville in 1803 and took over an existing foundry here in 1867. If you live anywhere in the northeastern United States, you have almost certainly used water that has flowed through a pipe that was made here.
But those 200 years ended quietly on Lincoln's Birthday, while Congress was still debating an economic stimulus package that was arriving too late to save these jobs in this old river town just south of Trenton, where too many families already know what happens when a factory locks its gates.
"We were expecting a temporary layoff, maybe three months," said Mark Babula, 38, unit chairman of Local 2040B of the United Steelworkers, the union that represents 175 hourly employees at Griffin. But the economy was worse than anyone had ever imagined: Housing starts had plummeted, and so had the demand for water pipes. Just a year earlier, just three miles downriver in Burlington, another old foundry, U.S. Pipe, had closed.
The news arrived several weeks before Christmas: a complete shutdown of production. It was the same kind of hammer blow that hit Mr. Babula's father and grandfather in 1974, when the Roebling steel mill - the center of the meticulously planned industrial village just three miles north of Griffin, and the maker of the suspension cables that hold up most of the landmark American bridges of the 20th century - shut down, and tossed them out of work.
The final day at Griffin was marked by no ceremony. "Everybody just kind of drifted away," said Mr. Babula, whose father grew up in a house built by Roebling for its workers and who lives with his wife and their 2-year-old son in an R. D. Wood house, a seven-minute walk from the plant where he worked for 15 years. "But everybody went out proud."
Production had stopped almost a week earlier, so when paychecks were distributed at midmorning, most workers saw little point in sticking around till the end of the shift. One by one, they trickled out through the gate, carrying bags filled with dirty clothes from their lockers, some with several pairs of boots dangling like strings of bass.
By midafternoon a couple dozen of them had convened at a place called Wesley's up in Roebling, across the street from the mostly vacant parcel where the old mill had once stood. They traded stories about their lost world at the same long mahogany bar where the Roebling workers had once traded stories about their own.
There was some grumbling: about who got the few jobs that will remain as the plant becomes a distribution center for pipes made at Griffin's other locations, in Virginia and Iowa; about the recent ascendancy of managers unschooled in the ways of the old foundrymen; about what seemed a myopic strategy of shutting down, rather than riding through the rough times with a layoff; about the gyrations that R. D. Wood must be making in his grave.
But mostly there was sadness, and worry about the prospect of finding new jobs in an economy so bad that it killed a plant that had survived so many other downturns. "I went from making $48,000 a year to unemployment," said John Sheehan, who worked at the foundry for 22 years, and whose wife's father and grandfather had worked there before him. When his health coverage ends in four and half months, his insurance will become unaffordable: $1,000 a month, he said, half his unemployment check. "I have to start all over at 42 years old."
Hourly wages at Griffin ranged from $18 to $23, but in good years, when demand was high and overtime was plentiful, some workers made more than $60,000. "Everyone needs water and sewer lines," Mr. Sheehan said. "I never thought this would happen."
More workers arrived at Wesley's as the afternoon deepened, and they helped themselves to the spread of free food the owners had put out for them: pulled pork, Cajun wings, vodka rigatoni. A few had leads for new jobs, but more did not, and the chances of finding ones like the kind they had just left seemed to be growing dimmer each day.
"When you lose your manufacturing base, you're losing your backbone, you're losing your strength," Tom Darmo said. "Now we're enslaved to China and these underdeveloped countries where they treat the workers terribly and they don't have pollution controls."
Mr. Darmo had a new listener, and he was telling the story again of his ascent to the summit of the cupola, a perch from which he had seen not just the foundry that he was about to leave, but also all the way north to the memory of another plant from which an earlier generation of workers had once been expelled: the remnants of the Roebling mill just across the street.
"It was so windy it was scary," he said. He held on tight, though, braced against the wind that threatened to blow him away, but never quite managed to.
e-mail: jersey@nytimes.com
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4) Even Worse for Young Workers
By BOB HERBERT
Op-Ed Columnist
February 28, 2009
http://www.nytimes.com/2009/02/28/opinion/28herbert.html
The employment situation in the U.S. is, if anything, worse than most people realize. And huge numbers of young people, ages 16 to 30, are being beaten down in ways that could leave scars for a lifetime.
Much of the attention in this economic downturn has focused on the growing legions of men and women who are officially counted as unemployed. There are now more than 11 million of them.
But a better picture of the economic distress related to employment emerges when the number of jobless Americans is combined with two other categories of workers: the underemployed (those who are working part time, for example, because they can't find full-time work) and the so-called labor force reserve, workers who have abandoned their job searches but who would work if employment became available.
This total pool of underutilized labor has now risen above 24 million, according to researchers at the Center for Labor Market Studies at Northeastern University in Boston. That total will only grow in the coming months.
The Obama administration has more than enough on its plate at the moment, but before long it will likely have to consider a range of additional strategies, beyond the recently passed stimulus package, for putting jobless Americans to work.
A comparison of the number of people being thrown out of work in this recession with that of the severe recession of 1981-82 will indicate why. The peak unemployment rate was higher in that earlier recession than today's 7.6 percent, largely because the last big wave of the baby-boom generation was entering the job market in the early '80s. Those boomers who couldn't find work were officially counted as unemployed.
What is different and more frightening about the current downturn is the number of people actually losing their jobs - being laid off or fired. That number is dramatically, dangerously higher.
The government uses two different surveys to gauge employment data. The household survey, based on telephone interviews, showed that job losses in the 13 months that followed the beginning of the 1981-82 recession reached 1.53 million. In the first 13 months of this recession, the number of jobs lost, according to the household survey, has been a staggering 4 million.
The payroll survey, which is based on employment records, showed job losses of 1.7 million in
the first 13 months of the earlier downturn compared with 3.5 million in the current recession.
Pick your poison. This is not the kind of downturn Americans are used to.
The ones who are being hit the hardest and will have the most difficult time recovering are America's young workers. Nearly 2.2 million young people, ages 16 through 29, have already lost their jobs in this recession. This follows an already steep decline in employment opportunities for young workers over the past several years.
Good jobs were hard to find for most categories of workers during that period. One of the results has been that older men and women have been taking and holding onto jobs that in prior eras would have gone to young people.
"What we've seen over the past eight years, for young people under 30, is the largest age reversal with regard to jobs that we've ever had in our history," said Andrew Sum, the director of the Center for Labor Market Studies. "The younger you are, the more you got pushed out of this labor market."
There were not enough jobs to go around before the recession took hold. So the young, the poor and the poorly educated were already suffering. Now that pool of suffering is rapidly expanding.
This has ominous long-term implications for the country. The economy cannot perform well with such a large cohort of young people condemned to marginal economic status.
Young men and women who remain unemployed for substantial periods of time find it very difficult to make up that ground. They lose the experience and training they would have gained by working. Even if they eventually find employment, they tend to lag behind their peers when it comes to wages, promotions and job security.
Moreover, as the economy worsens, even the college educated are feeling the crunch.
According to a report by researchers working with Mr. Sum: "While young college graduates have fared the best in maintaining some type of employment, a growing fraction of them are becoming mal-employed, holding jobs in occupations that do not require much schooling beyond high school, often displacing their less-educated peers."
Employment problems have festered in the United States for decades. The economy will never be brought to a state of health until those problems are more thoughtfully and more directly engaged. This will become more and more clear with each passing month of this hideous recession.
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5) A Clean Fight
By TIMOTHY HSIA
Op-Ed Contributor
February 28, 2009
http://www.nytimes.com/2009/02/28/opinion/28hsia.html/
BEFORE my Stryker squadron deployed to Iraq from Germany, the 500 of us cleaned up after ourselves. We spent a day removing every environmental trace of our training activities in the Bavarian heartland. Plastic and paper were sorted to comply with German recycling policies. Soil and plants contaminated by fuel leaks were dug up and placed in sealed bags. Depleted batteries were collected for proper disposal. We left our training grounds pristine.
This was America's 21st-century military at work: soldiers are trained not only to battle insurgents but also to be good stewards of the environment. Sadly, during combat tours, we have forgotten the strict environmentally friendly procedures we practice in the United States or in host countries like Germany, Japan and South Korea.
On military bases in Iraq, plastic, paper, aerosol cans, Styrofoam plates, food waste, batteries, digital equipment and hygiene products fall under one category: waste. It is simply dumped at the edge of the base, then burned at night, irritating soldiers' lungs. Untreated wastewater is also haphazardly disposed of and gradually finds its way into Iraq's waterways, which can pose health risks for Americans on the base and Iraqis who live nearby.
It would be convenient to blame the chaos of a war zone for the military's mismanagement of waste. But the issue is far more complex. Indeed, a major part of the problem is that the military has absolved itself of dealing with waste in Iraq and has contracted out the collection and disposal of it.
These companies - usually American firms that subcontract to foreign workers - operate free of regulation by either the Iraqi government or the United States military. Sometimes they simply remove waste to an abandoned field - out of sight, out of mind. Often, they use burn pits. Soldiers at a base in Balad have accused one contractor, KBR, of making them ill from burning toxic materials like aircraft fuel and arsenic, and medical waste, including amputated limbs. But in my experience Balad is not an isolated incident and waste mismanagement occurs on many bases.
All this trash has caught the eyes of enterprising Iraqis looking for scrap metal or reusable objects like discarded headphones and DVDs. When commodity prices increased, they resorted to picking up used ammunition brass as soon as soldiers left a practice firing range.
Although this inadvertent recycling might seem like a fine way to deal with trash, some of this material has gotten into the wrong hands and has been used to deadly effect against American and Iraqi soldiers. There have been accounts of insurgents dressing up in discarded uniforms and hiding explosive devices in abandoned equipment. Yet the Army's counterinsurgency manual still gives sparse attention to the proper disposal of equipment and supplies, as well as other environmental concerns.
Waste is an overarching problem: our counterinsurgency policy of securing the populace and providing access to essential services can't be separated from environmental considerations. It's vital that the people we live among are getting clean water, that farmers are able to grow their crops, that communities aren't buried under trash.
With President Obama's planned drawdown of our military forces in Iraq by mid-2010, we need to ensure that our environmental legacy there is a positive one. But the security agreement between Washington and Baghdad contains hardly any details about protecting the environment. The United States is committed only to respecting Iraqi laws - a low bar because Iraq's environmental agencies are still in their infancy. The United States military should take the lead by adopting - and requiring all contractors to adopt - American recycling practices.
In the last few years, the United States military has become a much more environmentally conscious organization. But these eco-friendly practices need to be applied every place where the military and civilian contractors operate, including Iraq. The military will not only protect the health and safety of American troops and local populations, but also leave behind a greener country.
Timothy Hsia is an Army infantry captain.
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6) Forced From Executive Pay to Hourly Wage
By MICHAEL LUO
March 1, 2009
http://www.nytimes.com/2009/03/01/us/01survival.html?hp
TEMPE, Ariz. - Mark Cooper started his work day on a recent morning cleaning the door handles of an office building with a rag, vigorously shaking out a rug at a back entrance and pushing a dust mop down a long hallway.
Nine months ago he lost his job as the security manager for the western United States for a Fortune 500 company, overseeing a budget of $1.2 million and earning about $70,000 a year. Now he is grateful for the $12 an hour he makes in what is known in unemployment circles as a "survival job" at a friend's janitorial services company. But that does not make the work any easier.
"You're fighting despair, discouragement, depression every day," Mr. Cooper said.
Working five days a week, 9 a.m. to 6 p.m., Mr. Cooper is not counted by traditional measures as among the recession's casualties at this point. But his tumble down the economic ladder is among the more disquieting and often hidden aspects of the downturn.
It is not clear how many professionals like Mr. Cooper have taken on these types of lower-paying jobs, which are themselves in short supply. Many are doing their best to hold out as long as possible on unemployment benefits and savings while still looking for work in their fields.
About 1.7 million people, however, were working part-time in January because they could not find full-time work, a 40 percent jump from December 2007, when the recession began, according to the Bureau of Labor Statistics.
And experts agree that as the economic downturn continues and as more people begin to exhaust their jobless benefits and other options, the situation Mr. Cooper is in will inevitably become more common.
Interviews with more than two dozen laid-off professionals across the country, including architects, former sales managers and executives who have taken on lower-paying, stop-gap jobs to help make ends meet, found that they were working for places like U.P.S., a Verizon Wireless call center and a liquor store. For many of the workers, the psychological adjustment was just as difficult as the financial one, with their sense of identity and self-worth upended.
"It has been like peeling back the layers of a bad onion," said Ame Arlt, 53, who recently accepted a position as a customer-service representative at an online insurance-leads referral service in Franklin, Tenn., after 20 years of working in executive jobs. "With every layer you peel back, you discover something else about yourself. You have to make an adjustment."
Some people had exhausted their jobless benefits, or were ineligible; others said it was impossible for them to live on their unemployment checks alone, or said it was a matter of pride, or sanity, that drove them to find a job, any job.
In just one illustration of the demand for low-wage work, a spokesman for U.P.S. said the company saw the number of applicants this last holiday season for jobs sorting and delivering packages almost triple to 1.4 million from the 500,000 it normally receives.
When Ms. Arlt applied for the job, she sent in a stripped-down résumé that hid her 20-year career at national media companies, during which she ascended to vice president of brand development at the On Command Video Corporation and was making $165,000 a year. She decided in 2001 to start her own business, opening an equestrian store and then founding a magazine devoted to the sport. But with the economy slowing, she was forced to shutter both businesses by June of last year.
After applying for more than 100 jobs, mostly director-level and above in marketing and branding, and getting just two interviews, Ms. Arlt said she realized last fall that she had to do something to "close the monthly financial hemorrhage."
Her new job at HometownQuotes pays $10 to $15 an hour and has mostly entailed data entry. But even though she has parted ways with some friends because she is no longer in their social stratum, Ms. Arlt said she was glad she was no longer sitting at home, "thinking, 'Who have I not heard from today?' "
Her new paycheck covers her mortgage but not her other living expenses. Recently, she cashed out what was left of her retirement portfolio, about $17,000.
"It has been the hardest thing in my life," she said. "It has been harder than my divorce from my husband. It has really been even worse than the death of my mother."
Nearly all of those interviewed said they considered their situations temporary and planned to resume their careers where they left off once the economy improves. But there are people like John Eller, 51, of Lee's Summit, Mo., who offer a glimpse of how difficult it can be to bounce back.
Mr. Eller had been a senior director at Sprint, earning as much as $150,000 a year and overseeing 7,000 employees at 13 call centers, before being laid off in 2002 amid the economic contraction after the Sept. 11 terrorist attacks.
A year later, he found another job, at roughly half the pay, managing a call center in New Jersey. After he lost that job two years later in a downsizing, Mr. Eller found himself out of work for another year before landing a contract position running two call centers in Kansas and Illinois, earning close to six figures.
But after that ended a year later, he was unable to find work for several months. In July 2007, he took what he thought would be a temporary job for $10 an hour as a baker in a grocery store. He was laid off again last October.
Mr. Eller quickly landed a new survival job, working as a supervisor on the overnight shift for a contractor processing immigration applications for the federal government at a salary of about $34,000 a year. But with eight children and a wife to support, Mr. Eller said he was still "below poverty level." The family has not been able to make mortgage payments in five months and has been on the brink of foreclosure.
"I'm still scratching and clawing and trying to work my way back," he said.
In Mr. Cooper's case, relying on unemployment checks was never a serious consideration. The maximum benefit that jobless people can collect in Arizona is $240 a week, among the lowest in the country - and much less than is required to cover the mortgage on the comfortable four-bedroom home in Glendale that he and his wife, Maggie Macias-Cooper, share.
Mrs. Macias-Cooper, who works as a personal trainer in a gym built in what used to be the couple's three-car garage, has seen her client base shrink to 10 from about 50 over the last year.
In addition to giving Mr. Cooper a job as a janitor, his friend agreed to pay for the couple's benefits through Cobra. Maintaining health care coverage was paramount for the family because Mrs. Macias-Cooper recently had breast cancer.
Some unemployed professionals said they decided not to seek even part-time work because it might interfere with their job searches. But Mr. Cooper rises every day at 4 a.m. and, after a time of prayer, devotes two hours to his job hunt on the computer. He prints out a detailed call list of prospective employers to take with him, squeezing in phone conversations during breaks throughout the day from his pickup truck, which he calls his "office."
"There were times I broke down," Mr. Cooper said. "I broke down thinking, 'This is what I've become.' "
But Mrs. Macias-Cooper, who admitted that she was initially embarrassed about her husband's new job, says she is now grateful.
"There is no shame," said Mrs. Macias-Cooper, who grew teary during an interview at their home. "I am very proud of my husband that he will go to any lengths, do whatever it takes, to keep his family afloat, if it means mopping floors, cleaning urinals."
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7) Guess What Got Lost in the Loan Pool?
By GRETCHEN MORGENSON
Fair Game
March 1, 2009
http://www.nytimes.com/2009/03/01/business/01gret.html?ref=business
WE are all learning, to our deep distress, how the perpetual pursuit of profits drove so many of the bad decisions that financial institutions made during the mortgage mania.
But while investors tally the losses that were generated by loose lending so far, the impact of another lax practice is only beginning to be seen. That is the big banks' minimalist approach to meeting legal requirements - bookkeeping matters, really - when pooling thousands of loans into securitization trusts.
Stated simply, the notes that underlie mortgages placed in securitization trusts must be assigned to those trusts soon after the firms create them. And any transfers of these notes must also be recorded.
But this seems not to have been a priority with many big banks. The result is that bankruptcy judges are finding that institutions claiming to hold the notes that back specific mortgages often cannot prove it.
On Feb. 11, a circuit court judge in Miami-Dade County in Florida set aside a judgment against Ana L. Fernandez, a borrower whose home had been foreclosed and repurchased on Jan. 21 by Chevy Chase Bank, the institution claiming to hold the note. But the bank had been unable to produce evidence that the original lender had assigned the note, which was in the amount of $225,000, to Chevy Chase.
With the sale set aside, Ms. Fernandez remains in the home. "We believe this loan was never assigned," said Ray Garcia, the lawyer in Miami who represented the borrower. Now, he said, it is up to whoever can produce the underlying note to litigate the case. The statute of limitations on such a matter runs for five years, he said.
A spokeswoman for Capital One, which is in the process of acquiring Chevy Chase, did not return a phone call on Friday seeking comment.
Mr. Garcia has another case in which a borrower tried to sell his home but could not because the note underlying a $60,000 second mortgage cannot be found. The statute of limitations on the matter will expire in October, he said, and if the note holder has not come forward by then, the borrower will be free of his obligation on the second mortgage.
No one knows how many loans went into securitization trusts with defective documentation. But as messes go, this one has, ahem, potential. According to Inside Mortgage Finance, some eight million nonprime mortgages were put into securities pools in 2005 and 2006 and sold to investors. The value of these loans was $797 billion in 2005 and $815 billion in 2006.
If notes underlying even some of these mortgages were improperly assigned or lost, that will surely complicate pending legislation intended to allow bankruptcy judges to modify mortgage terms for troubled borrowers. A so-called cram-down provision in the law would let judges reduce the size of a loan, forcing whoever holds the security interest in it to take a loss.
But if the holder of the note is in doubt, how can these loans be modified?
Bookkeeping is such a bore, especially when there are billions to be made shoveling loans into trusts like coal into the Titanic's boilers. You can imagine the thought process: Assigning notes takes time and costs money, why bother? Who's going to ask for proof of ownership of these notes anyhow?
But as the Fernandez case and others indicate, bankruptcy judges across the country are increasingly asking these pesky questions. Two judges in California - one in state court, another in federal court - issued temporary restraining orders last month stopping foreclosures because proper documentation was not produced by lenders or their representatives. And in another California case, a borrower's lawyer was awarded $8,800 in attorney's fees relating to costs spent litigating against a lender that could not prove it had the right to foreclose.
California cases are especially interesting because foreclosures in that state can be conducted without the oversight of a judge. Borrowers who do not have a lawyer representing them can be turned out of their homes in four months.
Samuel L. Bufford, a federal bankruptcy judge in Los Angeles since 1985, has overseen some 100,000 bankruptcy cases. He said that in previous years, he rarely asked for documentation in a foreclosure case but that problems encountered in mortgage securitizations have made him become more demanding.
In a recent case, Judge Bufford said, he asked a lender to produce the original of the note and it turned out to be different from the copy that had been previously submitted to the court. The original had been assigned to a bank that had then transferred it to Freddie Mac, the judge explained. "They had no clue what happened after that," he said. "Now somebody's got to go find that note."
"My guess is it's because in the secondary mortgage market they have been sloppy," Judge Bufford added. "The people who put the deals together get paid for the deals, but they don't get paid for the paperwork."
A small but spirited group of consumer lawyers has argued for years that the process of pooling residential mortgages into securities was so haphazard that proper documentation of the loans was never made in many cases. Leading the brigade is April Charney, a foreclosure lawyer at Jacksonville Legal Aid in Florida; she now trains consumer lawyers around the country to litigate these cases.
Depending on the documentation defect, lawyers say, investors in the trust could try to force the institution that sold the loan to the trust to buy it back. Many of these institutions would be unable to do so, however, because they are defunct. In the meantime, when judges are not persuaded that the documentation is proper, troubled borrowers can remain in their homes even if they are delinquent.
THE woes brought on by sloppy bookkeeping in securitizations will be on the agenda at the American Bankruptcy Institute's annual spring meeting on April 3. An article titled "Where's the Note, Who's the Holder," co-written by Judge Bufford and R. Glen Ayers, a former federal bankruptcy judge in Texas, will be the basis of a discussion at the meeting.
Mr. Ayers, who is a lawyer at Langley & Banack in San Antonio, said he expects that these documentation problems will halt a lot of foreclosures. That will mean pain for investors who hold the securities. The problem for those who expect to receive the benefit of the note, Mr. Ayers said, is that they "may not be able to show to the judge they have a right to foreclose."
"It's a huge problem," he added. "It's going to be expensive, I don't know how expensive, ultimately to the bondholders."
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8) Video of Police Beating [of 15-year-old girl in police custody]
Released in Washington State
By Robert Mackey
http://www.youtube.com/watch?v=ipb_PeXOdT4
http://thelede.blogs.nytimes.com/2009/03/02/video-of-police-beating-released-in-washington/
On Friday in Seattle, the King County Sheriff's Office released video showing a sheriff's deputy kicking and throwing punches at a 15-year-old girl in police custody, after the deputy was charged with fourth-degree assault in the case and pleaded not guilty.
In the video, taken by a camera in a cell in the SeaTac City Hall last November, the girl can be seen flipping her shoe at the deputy, Paul Schene, who responds by rushing at her, kicking her and forcing her to the floor, where he throws two punches as he kneels on the girl's back, and then lifts her to her feet by her hair.
The Seattle Post-Intelligencer reported that the video was released over the objections of Mr. Schene's lawyer, who claimed "it will inflame public opinion and will severely impact the deputy's right to a fair trial." But a judge in Seattle ruled that the recording was a public record and allowed the release. The Associated Press published this copy of the video on YouTube:
http://www.youtube.com/watch?v=ipb_PeXOdT4
The A.P. reports that the girl was arrested during an investigation of a stolen car. She later pleaded not guilty to a charge of taking a motor vehicle without permission.
KOMO television news in Seattle reported that the second deputy seen in the video, who helped handcuff the girl after Mr. Schene forced her to the floor of the holding cell, "was a trainee at the time and is not under investigation." According to KOMO:
The second deputy said the alleged victim was "real lippy," calling the deputies names and "basically trying to piss us off."
The Post-Intelligencer notes that the deputy who was charged in the beating, Mr. Schene, had "killed a mentally ill man" in 2006; the A.P. adds word of an earlier incident as well:
Schene was investigated previously for shooting two people - killing one - in the line of duty in 2002 and 2006. Both times his actions were found to be justified, said Ian Goodhew, prosecutor's deputy chief of staff.
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9) Ukraine Teeters as Citizens Blame Banks and Government
By CLIFFORD J. LEVY
March 2, 2009
http://www.nytimes.com/2009/03/02/world/europe/02ukraine.html?ref=world
KIEV, Ukraine - Steel and chemical factories, once the muscle of Ukraine's economy, are dismissing thousands of workers. Cities have had days without heat or water because they cannot pay their bills, and Kiev's subway service is being threatened. Lines are sprouting at banks, the currency is wilting and even a government default seems possible.
Ukraine, once considered a worldwide symbol of an emerging, free-market democracy that had cast off authoritarianism, is teetering. And its predicament poses a real threat for other European economies and former Soviet republics.
The sudden, violent protests that have erupted elsewhere in Eastern Europe seem imminent here now, too. Across Kiev last week, people spoke of rising anger about the crisis and resentment toward a government that they said was more preoccupied with squabbling than with rallying the country.
The sign held by Vasily Kirilyuk, an unemployed plumber camped out with other antigovernment demonstrators here in the past week, summed up the pervasive frustration: "Get rid of them all," it said.
Mr. Kirilyuk did not hesitate to take that further. "There will be a revolt," he said. "And people will come because they are just fed up."
Mr. Kirilyuk, 29, was standing in the same central square where throngs in 2004 carried out the Orange Revolution, a seminal event that brought to power a pro-Western government in Ukraine. He said he was a fervent supporter then of the protesters, but now he and a few dozen others who have set up tents here are demanding that the heroes of that revolution step down.
It is not hard to understand why world leaders are increasingly worried about the discontent and the financial crisis in Ukraine, which has 46 million people and a highly strategic location. A small country like Latvia or Iceland is one thing, but a collapse in Ukraine could wreck what little investor confidence is left in Eastern Europe, whose formerly robust economies are being badly strained.
It could also cause neighboring Russia, which has close ethnic and linguistic ties to eastern and southern Ukraine, to try to inject itself into the country's affairs. What is more, the Kremlin would be able to hold up Ukraine as an example of what happens when former Soviet republics follow a Western model of free-market democracy.
"Ukraine is a linchpin for stability in Europe," said Olexiy Haran, a professor of comparative politics at Kiev Mohyla University. "It is a key player between the expanding European Union and Russia. To use an alarmist scenario, you could imagine a situation in Ukraine that Russia tried to exploit in order to dominate Ukraine. That would make for a very explosive situation on the border of the European Union."
That Ukraine can cause problems for Europe was highlighted in January when Ukraine engaged in a dispute with Russia over how much it would pay Russia for natural gas, as well as over gas transport to the rest of Europe. The Kremlin shut off the gas for several days, and some European countries went without heat. The Kremlin also shut off gas to Ukraine in 2006 in a pricing dispute.
While Ukraine's economy is dependent on exports of steel and chemicals, which have plummeted, the crisis has cut deeply because people are disillusioned with the government.
President Viktor A. Yushchenko, a leader of the Orange Revolution, who garnered attention around the world in 2004 when his face was scarred in a poisoning episode, is so widely scorned that a recent poll found that 57 percent of people wanted him to resign.
His rivals have also lost popularity, as the public has become exasperated by years of political bickering. In February, the International Monetary Fund refused to release the next installment of a $16.4 billion rescue loan to Ukraine because the government would not adhere to an earlier agreement to pare its budget.
Around the same time, Ukraine's finance minister resigned, saying that the job had been "hostage to politics."
On Friday, the monetary fund projected that Ukraine's economy would shrink by 6 percent this year, and said that it was continuing to work with the government to find a way to disburse the rest of the rescue loan.
A presidential election is coming, probably to be held next January, and this prospect is making politicians, especially Prime Minister Yulia V. Tymoshenko, reluctant to adopt an austerity program that might alienate voters.
Mr. Yushchenko and Ms. Tymoshenko were pro-Western allies during the Orange Revolution, but have bitterly feuded since then, and he fired her once. A third rival, Viktor F. Yanukovich, a former prime minister who heads an opposition party that favors closer ties with Russia, also wants to be president.
On Friday, Mr. Yushchenko and Ms. Tymoshenko held a public meeting in an effort to demonstrate that they were working together. Mr. Yushchenko said he wanted "to show the readiness of all sides to take political responsibility for decisions which today are not easy."
Even so, the two did not announce further anticrisis measures.
All over Kiev have been signs that tensions are building.
On the city's outskirts, more than 200 tractor-trailer rigs were parked Thursday, their drivers threatening to block roads if the government did not help them with their debts, which they said were caused in part by the drop in the value of Ukraine's currency, the hryvnia.
The truckers dispersed Friday, only after the government said it would try to address their demands, but they said they would be back soon if they were ignored.
"The government is to blame for all this," said a trucker, Viktor V. Zarichnyuk, 26, who had been at the protest for 12 days. "We want the government and the national bank to agree that the money allocated by the International Monetary Fund, at least part of it, should go to regular people."
At a branch of the Rodovid Bank across town, a tense crowd gathered Friday morning. The bank, close to failing, was allowing withdrawals of only $35 a day. And so people, some of them pensioners fearful for their life savings, have been trooping each day, ever more aggravated, to try to get what they can.
"Every day we come here - it's insulting - in the cold and line up," said Alevtina A. Antonyuk, 58, an engineer. "They are nothing at this bank but a bunch of thieves."
Who is to blame, she was asked. Before she could answer, Dmitri I. Havrilkiv, 78, a retired crane operator, interrupted.
"The government has to be replaced," he shouted. "They just can't handle it!"
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10) U.S. Missiles Hit Militants in Pakistan, Killing Eight
By PIR ZUBAIR SHAH
March 2, 2009
http://www.nytimes.com/2009/03/02/world/asia/02pstan.html?ref=world
ISLAMABAD, Pakistan - Two missiles fired Sunday from American remotely piloted aircraft killed at least eight militants in a Taliban stronghold on the Afghan border, according to a local intelligence official and news reports.
The attack, in the Sora Rogha area of South Waziristan, a tribal region controlled by the Pakistani Taliban leader Baitullah Mehsud, hit a militant base, the official said. The dead included four Arab militants, the intelligence official said, speaking on the condition of anonymity because he was not authorized to speak to reporters.
Last year, American and Pakistani officials accused Mr. Mehsud of plotting the 2007 assassination of Benazir Bhutto, the former prime minister and the wife of Pakistan's current president, Asif Ali Zardari.
The attack is the fifth in the area controlled by Mr. Mehsud since President Obama took office, continuing the covert war run by the Central Intelligence Agency inside Pakistan.
More than a dozen young men from Sora Rogha have killed themselves in suicide attacks against targets inside Pakistan in the last two years, a local fighter said.
Separately, a senior law enforcement official, a commander of the Frontier Constabulary, was kidnapped Sunday by the Taliban in Swat, where the government announced a cease-fire with the militants last month.
An army official in Swat said the kidnapping broke the conditions of the cease-fire. The conditions were also tested by Sufi Mohammed, a militant leader in Swat, who said he was demanding the introduction of Islamic law by March 15. The introduction of a form of Islamic law was a demand of the Taliban when they agreed to the cease-fire.
Also Sunday, a suspected separatist group holding an American working for the United Nations in Pakistan said it would kill him in four days if the government did not release more than 1,000 imprisoned members of Baluchistan separatist groups, The Associated Press reported.
The American, John Solecki, was seized on Feb. 2 by gunmen who killed his driver in the southwestern city of Quetta in Baluchistan.
The previously unknown Baluchistan Liberation United Front set the deadline in a letter sent Sunday to the local news agency Online International News Network that was also read by an A.P. reporter.
A United Nations spokeswoman, Maki Shinohara, said the world organization was aware of the threat through the news reports and "took it seriously." The group issued a similar threat on Feb. 13, but did not carry it out.
Meanwhile, a security convoy carrying a sick soldier was attacked Sunday with small arms fire and roadside bombs in the Kabal area of Swat, according to a military statement that said two soldiers were wounded, The A.P. reported. The attack also violated the cease-fire.
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11) A.I.G. Reports Loss of $61.7 Billion as U.S. Gives More Aid
By ANDREW ROSS SORKIN and MARY WILLIAMS WALSH
March 3, 2009
http://www.nytimes.com/2009/03/03/business/03aig.html?ref=business
The federal government agreed Monday morning to provide an additional $30 billion in taxpayer money to the American International Group and loosen the terms of its huge loan to the insurer, even as the insurance giant reported a$61.7 billion loss, the biggest quarterly loss in history.
The loss of $22.95 a share compared with a fourth-quarter loss in the period a year ago of $5.3 billion or $2.08 a share. For the year, A.I.G. lost $99.3 billion or $37.84 a share, compared with a profit of $6.2 billion or $2.39 a share for 2007.
In the quarter, A.I.G. took a $21 billion charge related to taxes and wrote down $25.9 billion in assets, including mortgage-back securities and credit-default swaps.
The company's general insurance business lost $2.8 billion compared with a profit of $2.1 billion in the quarter a year ago. Premiums dropped 16.3 percent to $9.2 billion and earnings from premiums fell 5.9 percent to $10.98 billion.
The government intervention would be the fourth time that the United States has had to step in to help A.I.G., the giant insurer, avert bankruptcy. The government already owns nearly 80 percent of the insurer's holding company as a result of the earlier interventions, which included a $60 billion loan, a $40 billion purchase of preferred shares and $50 billion to soak up the company's toxic assets.
In a conference call Monday, the chief executive, Edward Liddy, who joined A.I.G. in September, said the insurer had drawn down about $38 billion of the $60 billion credit line it received from the government last year.
Earlier, in an interview on the NBC News program "Today," Mr. Liddy said A.I.G. "was in much worse condition than I thought." In addition, he said: "The economy is worse. The financial markets are worse."
Although he avoided offering a forecast on the first quarter, Mr. Liddy said A.I.G.'s outlook was "very much going to be influenced by what happens to the condition of the economy and the financial marketplace around the globe."
But he tried to reassure policyholders, saying that insurance portion of the company was in good shape. "It's all of the other ancillary businesses that are causing this," Mr. Liddy said. "And it's the decline in asset values around the globe."
Federal officials, who worked feverishly over the weekend to complete the restructuring, said they thought they had no choice but to prop up A.I.G., because its business and trading activities are so intricately woven through the world's banking system.
But the deal also presents more financial risks to taxpayers at a time when the public and Congress have been sharply questioning the wisdom of risking federal money to bail out private enterprises.
The government's commitment to A.I.G. far eclipses its rescue of other financial companies, including Citigroup, which has received $50 billion in rescue financing, and Bank of America, with $45 billion.
Credit rating agencies like Moody's, Fitch Ratings and Standard & Poor's had been preparing to sharply downgrade A.I.G.'s credit ratings on Monday because of the record quarterly loss. That would have forced A.I.G. to default on its debt, threatening to set off shock waves throughout the financial system as banks holding A.I.G. derivatives contracts would probably demand cash collateral and other payments from A.I.G. during a time when it has little to spare.
The major credit-rating agencies were briefed on the pending deal between A.I.G. and the government, the people involved in the talks said, and they have committed not to downgrade the company's debt as a result.
"The steps announced today provide tangible evidence of the U.S. government's commitment to the orderly restructuring of A.I.G. over time in the face of continuing market dislocations and economic deterioration, the Treasury said in a statement.
Shortly after the announcement of the additional government assistance, the rating agency, Fitch, affirmed some A.I.G. ratings.
Under the deal, the government will commit $30 billion in cash to A.I.G. from the Troubled Asset Relief Program, should the company need it, the Treasury Department said in a statement. A.I.G. is not expected to draw down the money immediately, but the government's commitment was enough to satisfy the rating agencies.
Another part of the deal would allow A.I.G. to exchange
$40 billion in preferred nonvoting shares, which paid a 10 percent dividend, for new preferred shares that do not require a dividend. That would save A.I.G. $4 billion annually.
To further ease A.I.G.'s debt burden, instead of paying back $38 billion in cash with interest that it has used from a federal credit line, government will convert that into equity in two of the insurer's subsidiaries in Asia - American International Assurance and the American Life Insurance Company.
Both units are performing well. This would give the government direct ownership in those subsidiaries and provide saleable assets to American taxpayers even if the A.I.G. holding company were to default on its loans.
The government stake in American International Assurance will probably be controversial. The unit had been put up for sale recently, without success. That suggests that the government is giving A.I.G. better terms than private investors were willing to give, exposing the government to further accusations that it is providing a handout to A.I.G.
Also as part of the deal, the government would agree to lower the interest rate on all remaining A.I.G. debt to match the London Interbank Offered Rate, or Libor. That would replace the previous rate, which was three percentage points higher than Libor. That move would save A.I.G. $1 billion in interest payments.
The new cash commitment reached on Sunday represented the fourth time since September that the federal government has taken steps to keep A.I.G. from collapsing. The previous rescues were intended to stabilize A.I.G. and buy it time to restructure. But the rescues were insufficient, in part because A.I.G. has either invested in or insured so many assets that keep losing value as the economy sours.
In September, the Federal Reserve lent A.I.G. $85 billion when the company suddenly found itself unable to meet a round of cash calls. To secure the emergency loan, A.I.G. issued the Fed warrants for slightly less than 80 percent of the company's shares.
Officials said at the time that they thought the loan would provide A.I.G. all the cash it could possibly need. The government brought in a Mr. Liddy to sell off some of A.I.G.'s operating units to raise money, since the rescue loan had to be paid back within two years. Mr. Liddy drew up a plan, saying he expected a smaller, well-capitalized version of A.I.G. to remain after the restructuring.
But in just weeks it became clear that A.I.G.'s problems were so grave the $85 billion would not be enough. It was using up that money alarmingly fast, thus burdening itself with higher than expected debt-servicing costs, because it had to pay the Fed a higher rate of interest on the part of the loan that it drew down.
In October, the government cut A.I.G. some slack by creating a new $38 billion facility to shore up its securities lending business, and gave the company access to a new commercial paper program, which had a much lower interest rate than the rescue loan.
But that was not enough either. In mid-November, the government restructured its loans to A.I.G., raising its total commitment to $150 billion. The new arrangement reduced the rescue loan to $60 billion and stretched out its term to five years instead of two.
At the same time, it injected $40 billion into A.I.G. in exchange for preferred shares. And it created two special-purpose entities to take the most toxic assets then plaguing A.I.G. out of play.
Those arrangements kept the government's stake in A.I.G. at 77.9 percent. The government has not wanted to go above 80 percent, because it would then have to consolidate all of A.I.G.'s assets and liabilities into its own finances, putting taxpayers on the hook for the claims of roughly 76 million insurance policyholders around the world.
While November's restructuring did buy A.I.G. more time, it was not able to sell the operating units that Mr. Liddy put up for sale - or, when assets were sold, the prices were shockingly low.
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12) Wars, Endless Wars
By BOB HERBERT March 3, 2009
Op-Ed Columnist
http://www.nytimes.com/2009/03/03/opinion/03herbert.html
The singer Edwin Starr, who died in 2003, had a big hit in 1970 called “War” in which he asked again and again: “War, what is it good for?”
The U.S. economy is in free fall, the banking system is in a state of complete collapse and Americans all across the country are downsizing their standards of living. The nation as we’ve known it is fading before our very eyes, but we’re still pouring billions of dollars into wars in Afghanistan and Iraq with missions we are still unable to define.
Even as the U.S. begins plans to reduce troop commitments in Iraq, it is sending thousands of additional troops into Afghanistan. The strategic purpose of this escalation, as Defense Secretary Robert Gates acknowledged, is not at all clear.
In response to a question on NBC’s “Meet the Press” on Sunday, Mr. Gates said:
“We’re talking to the Europeans, to our allies; we’re bringing in an awful lot of people to get different points of view as we go through this review of what our strategy ought to be. And I often get asked, ‘Well, how long will those 17,000 [additional troops] be there? Will more go in?’ All that depends on the outcome of this strategy review that I hope will be done in a few weeks.”
We invaded Afghanistan more than seven years ago. We have not broken the back of Al Qaeda or the Taliban. We have not captured or killed Osama bin Laden. We don’t even have an escalation strategy, much less an exit strategy. An honest assessment of the situation, taking into account the woefully corrupt and ineffective Afghan government led by the hapless Hamid Karzai, would lead inexorably to such terms as fiasco and quagmire.
Instead of cutting our losses, we appear to be doubling down.
As for Iraq, President Obama announced last week that substantial troop withdrawals will take place over the next year and a half and that U.S. combat operations would cease by the end of August 2010. But, he said, a large contingent of American troops, perhaps as many as 50,000, would still remain in Iraq for a “period of transition.”
That’s a large number of troops, and the cost of keeping them there will be huge. Moreover, I was struck by the following comment from the president: “There will surely be difficult periods and tactical adjustments, but our enemies should be left with no doubt. This plan gives our military the forces and flexibility they need to support our Iraqi partners and to succeed.”
In short, we’re committed to these two conflicts for a good while yet, and there is nothing like an etched-in-stone plan for concluding them. I can easily imagine a scenario in which Afghanistan and Iraq both heat up and the U.S., caught in an extended economic disaster at home, undermines its fragile recovery efforts in the same way that societies have undermined themselves since the dawn of time — with endless warfare.
We’ve already paid a fearful price for these wars. In addition to the many thousands of service members who have been killed or suffered obvious disabling injuries, a study by the RAND Corporation found that some 300,000 are currently suffering from post-traumatic stress disorder or depression, and that 320,000 have most likely experienced a traumatic brain injury.
Time magazine has reported that “for the first time in history, a sizable and growing number of U.S. combat troops are taking daily doses of antidepressants to calm nerves strained by repeated and lengthy tours in Iraq and Afghanistan.”
Suicides among soldiers rose in 2008 for the fourth consecutive year, largely because of the stress of combat deployments. It’s believed that 128 soldiers took their own lives last year.
Much of the country can work itself up to a high pitch of outrage because a banker or an automobile executive flies on a private jet. But we’ll send young men and women by the thousands off to repeated excursions through the hell of combat — three tours, four tours or more — without raising so much as a peep of protest.
Lyndon Johnson, despite a booming economy, lost his Great Society to the Vietnam War. He knew what he was risking. He would later tell Doris Kearns Goodwin, “If I left the woman I really loved — the Great Society — in order to get involved with that bitch of a war on the other side of the world, then I would lose everything at home. All my programs... All my dreams...”
The United States is on its knees economically. As President Obama fights for his myriad domestic programs and his dream of an economic recovery, he might benefit from a look over his shoulder at the link between Vietnam and the still-smoldering ruins of Johnson’s presidency.
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13) Tenants Wary of Clustering of Homeless
By JULIE BOSMAN
March 4, 2009
http://www.nytimes.com/2009/03/04/nyregion/04homeless.html?hp
Henry Perry just cannot get used to the 10 p.m. curfew notice posted since October in the Bronx apartment building where he has lived since 1963. Or the sign-in sheet, where the newer residents dutifully log comings and goings. Or the 24-hour security guard seated at a desk in the lobby.
“She came when the homeless people did,” Mr. Perry, a wiry, gray-haired man of 68, nodded at the guard last week.
Twenty-one of the 50 units in Mr. Perry’s five-story brick building are now occupied by homeless families as part of a Bloomberg administration program that has turned dozens of apartment buildings throughout the city, most of them in the Bronx, into de facto homeless shelters. Known as cluster-site housing, the program contracts with nonprofit agencies to temporarily place families in apartments; it has swelled in two years to 1,503 apartments from 1,092, at an estimated cost of $59 million this year.
With the number of homeless families in New York at near-record levels, cluster-site has quietly replaced the costly and controversial scatter-site housing program that the Bloomberg administration pledged in 2002 to wipe out. Unlike the previous program, it uses nonprofit agencies to provide employment help and other social services to the homeless families, who spend an average of 284 days — about nine months — in the apartments.
But while rent-paying tenants in the buildings are not subject to the curfew or sign-in requirements, many complain that their landlords have been pushing them out to make way for homeless families because the cluster-site program pays far more — an average of $1,730 — for the units, many of which are rent-stabilized (Mr. Perry pays $248.68 a month). Many say they have been intimidated with repeated notices regarding rent or other matters, and that they were never notified of the impending changes in their buildings (the city says it notifies residents only if more than half the building will be used).
At Mr. Perry’s building, on Mosholu Parkway in the northwest Bronx, longtime tenants were stunned on Sunday, Oct. 26, 2008, when several homeless families arrived in vans, carrying their belongings in shopping bags, and were swiftly ushered into recently renovated apartments.
“They’re going to bring in homeless people, and then they’re going to make us homeless,” said Deonarine Srikishun, 64, who pays $830 a month for the two-bedroom apartment where he has lived for 27 years.
Advocates for the homeless condemn the cluster-site program for temporarily solving one problem by creating another: displacing low-income residents. Rather than put homeless people in temporary apartments, they say, the city should give more of them the federal subsidized housing vouchers known as Section 8.
“The city is shooting itself in the foot,” said Steven Banks, the attorney in chief for the Legal Aid Society. “It is far more costly to house families in apartments as shelter than to house them in permanent housing.”
But Deputy Mayor Linda I. Gibbs, who oversees homeless programs, said cluster-site housing worked well because it provided families with caseworkers who develop independent living plans, including target move-out dates and employment goals. Families are expected to abide by a curfew, keep their rooms tidy — there are weekly inspections — and search for jobs.
“Our strategies are focusing on helping the families to become economically independent,” Ms. Gibbs said.
The controversy over cluster-site housing comes amid Mayor Michael R. Bloomberg’s years-long battle to reduce the city’s homeless population. He declared in 2004, when there were 38,000 homeless on the city’s rolls, that he hoped to cut the number by two-thirds within five years; instead, the city is currently housing 35,000 people.
Putting homeless people into apartments began during the Giuliani administration as an emergency measure to relieve overcrowded shelters. By 2002, it had grown from 50 units to more than 2,000, and was widely criticized as an expensive failure costing $2,900 a month per apartment. After a public outcry, Mayor Bloomberg and Ms. Gibbs, then the commissioner of homeless services, vowed to shut down the program.
Technically, they did. According to the Department of Homeless Services, there were 723 scatter-site units in December 2006; by January 2007, there were zero. But in a new column of data, labeled “cluster sites,” there were 1,092 units, a number that slowly crept up throughout 2007.
Unlike the scatter-site program, in which the city paid rent directly to landlords and provided little else for the families, the Department of Homeless Services works with five nonprofit agencies that seek out landlords, negotiate rents and offer support services to tenants in the 127 cluster-site buildings. Before the agencies establish longer-term contracts with the city, they are paid $90 per diem, about $2,700 per month, per family.
Robert V. Hess, the homeless services commissioner, said each apartment was inspected before a homeless family moved in to make sure it was suitable.
But at 3001 Briggs Avenue, a 26-unit building in Bedford Park in the Bronx that has been largely taken over by the cluster-site program in recent months, there are 315 open housing-code violations, according to city records, including complaints of broken windows, peeling lead paint, mice, roaches and bedbugs.
Outside the quiet, run-down building on Sunday afternoon, a security guard in a dark blue jacket patrolled the front door while a group of children played in the lobby.
Dominique Gee, 15, who was carrying a bag of laundry, paused outside the entrance of the building, where she moved with her mother, stepfather and sister three days earlier. “It’s not too bad, except we’re not allowed to have visitors,” she said. “So if we want to see somebody, we have to come outside.”
The cluster-site program at the building is run by Aguila Inc., an organization that began working with the city in 2000 with 55 scatter-site units; it now operates more than 300 cluster-site units in the Bronx as well as standalone shelters for single adults.
According to public records, Aguila received $9.2 million from the Department of Homeless Services in 2006. Peter Rivera, the executive director of Aguila and the son of the Bronx state assemblyman of the same name, did not return calls seeking comment.
Fernando Tirado, the district manager for Community Board 7 in the Bronx, said he had been bombarded with calls from residents on Briggs Avenue. (Howard Miller, the manager of the building, did not return repeated telephone messages.)
“It has become apparent to us that landlords have been forcing tenants out, either through coercion or through other means,” said Mr. Tirado, who called the cluster-site program “despicable.”
Geraldine Salvatorelli, whose 91-year-old father is among the few remaining rent-paying tenants there, said: “It was easy to get most of them out — they owed back rent.”
Mr. Hess, of the homeless services department, says the city investigates thoroughly when it receives information that tenants have been intimidated, and had confirmed two such cases over the last three years.
“We’re not going to allow anything to happen where other tenants are going to feel that they’ve been pushed out so we can occupy more,” he said.
At the building on Mosholu Parkway, Mr. Srikishun, 64, said his landlord had wrongly accused him of owing more than $8,000 in back rent, slipping notices under his third-floor apartment door.
“He’s torturing me with these papers under the door, every month,” Mr. Srikishun said, his voice rising in anger. “All these things are fabricated.” He says he has always paid his rent and owes nothing. The property managers, Lev Management, did not return calls.
Despite the opposition, the number of cluster-site apartments appears likely to keep increasing, given the deepening recession and state budget cuts to homelessness-prevention programs.
“We certainly understand the pressure they’re under,” said John Reilly, the executive director of the Fordham Bedford Housing Corporation. “But to take existing affordable housing off the market, it just seems like it’s an agency solving its own problem, but not solving the city’s problem.”
Catherine Barbosa, an elementary school teacher who pays $1,050 a month for a two-bedroom apartment in one of the cluster-site buildings, said she sympathized with the problem — but not the solution.
“I understand that homeless people, they need a place to live, they don’t need to be out on the street,” she said. “I don’t pay rent to live in a homeless shelter, that’s how I feel.”
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14) Armenia: Falling Currency Leads to Run on Stores
By THE ASSOCIATED PRESS
World Briefing | Europe
March 4, 2009
http://www.nytimes.com/2009/03/04/world/europe/04briefs-FALLINGCURRE_BRF.html?ref=world
Armenians rushed to buy bread, butter and other staples on Tuesday and stores shut down in panic after the government announced it would let the currency fall and was seeking a bailout from the International Monetary Fund. Banking authorities said the national currency, the dram, could lose a quarter of its value, and prices for imported goods were expected to rise sharply.
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15) Ex-Leaders of Countrywide Profit From Bad Loans
By ERIC LIPTON
March 4, 2009
http://www.nytimes.com/2009/03/04/business/04penny.html?ref=us
CALABASAS, Calif. — Fairly or not, Countrywide Financial and its top executives would be on most lists of those who share blame for the nation’s economic crisis. After all, the banking behemoth made risky loans to tens of thousands of Americans, helping set off a chain of events that has the economy staggering.
So it may come as a surprise that a dozen former top Countrywide executives now stand to make millions from the home mortgage mess.
Stanford L. Kurland, Countrywide’s former president, and his team have been buying up delinquent home mortgages that the government took over from other failed banks, sometimes for pennies on the dollar. They get a piece of what they can collect.
“It has been very successful — very strong,” John Lawrence, the company’s head of loan servicing, told Mr. Kurland one recent morning in a glass-walled boardroom here at PennyMac’s spacious headquarters, opened last year in the same Los Angeles suburb where Countrywide once flourished.
“In fact, it’s off-the-charts good,” he told Mr. Kurland, who was leaning back comfortably in his leather boardroom chair, even as the financial markets in New York were plunging.
As hundreds of billions of dollars flow from Washington to jump-start the nation’s staggering banks, automakers and other industries, a new economy is emerging of businesses that hope to make money from the various government programs that make up the largest economic rescue in history.
They include big investors who are buying up failed banks taken over by the federal government and lobbyists. And there is PennyMac, led by Mr. Kurland, 56, once the soft-spoken No. 2 to Angelo R. Mozilo, the perpetually tanned former chief executive of Countrywide and its public face.
Mr. Kurland has raised hundreds of millions of dollars from big players like BlackRock, the investment manager, to finance his start-up. Having sold off close to $200 million in stock before leaving Countrywide, he has also put up some of his own cash.
While some critics are distressed that Mr. Kurland and his team are back in business, the executives say that PennyMac’s operations serve as a model for how the government, working with banks, can help stabilize the housing market and lead the nation out of the recession. “It is very important to the entire team here to be part of a solution,” Mr. Kurland said, standing in his office, which has views of the Santa Monica Mountains.
It is quite evident that their efforts are, in fact, helping many distressed homeowners.
“Literally, their assistance saved my family’s home,” said Robert Robinson, of Felton, Pa., whose interest rate was cut by more than half, making his mortgage affordable again.
But to some, it is disturbing to see former Countrywide executives in the industry again. “It is sort of like the arsonist who sets fire to the house and then buys up the charred remains and resells it,” said Margot Saunders, a lawyer with the National Consumer Law Center, which for years has sought to place limits on what it calls abusive lending practices by Countrywide and other companies.
More than any other major lending institution, Countrywide has become synonymous with the excesses that led to the housing bubble. The firm’s reputation has been so tarnished that Bank of America, which bought it last year at a bargain price, announced that the name and logo of Countrywide, once the biggest mortgage lender in the nation, would soon disappear.
Mr. Kurland acknowledges pushing Countrywide into the type of higher-risk loans that have since, in large numbers, gone into default. But he said that he always insisted that the loans go only to borrowers who could afford to repay them. He also said that Countrywide’s riskiest lending took place after he left the company, in late 2006, after what he said was an internal conflict with Mr. Mozilo and other executives, whom he blames for loosening loan standards.
In retrospect, Mr. Kurland said, he regrets what happened at Countrywide and in the mortgage industry nationwide, but does not believe he deserves blame. “It is horrible what transpired in the industry,” said Mr. Kurland, who has never been subject to any regulatory actions.
But lawsuits against Countrywide raise questions about Mr. Kurland’s portrayal of his role. They accuse him of being at the center of a culture shift at Countrywide that started in 2003, as the company popularized a type of loan that often came with low “teaser” interest rates and that, for some, became unaffordable when the low rate expired.
The lawsuits, including one filed by New York State’s comptroller, say Mr. Kurland was well aware of the risks, and even misled Countrywide’s investors about the precariousness of the company’s portfolio, which grew to $463 billion in loans, from $62 billion, three times faster than the market nationwide, during the final six years of his tenure.
“Kurland is seeking to capitalize on a situation that was a product of his own creation,” said Blair A. Nicholas, a lawyer representing retired Arkansas teachers who are also suing Mr. Kurland and other former Countrywide executives. “It is tragic and ironic. But then again, greed is a growth industry.”
David K. Willingham, a lawyer representing Mr. Kurland in several of these suits, said the allegations related to Mr. Kurland were without merit, and motions had been filed to seek their dismissal.
Federal banking officials — without mentioning Mr. Kurland by name — added that just because an executive worked at an institution like Countrywide did not mean he was to blame for questionable lending practices. They said that it was important to do business with experienced mortgage operators like Mr. Kurland, who know how to creatively renegotiate delinquent loans.
PennyMac, whose full legal name is the Private National Mortgage Acceptance Company, also received backing from BlackRock and Highfields Capital, a hedge fund based in Boston. It makes its money by buying loans from struggling or failed financial institutions at such a huge discount that it stands to profit enormously even if it offers to slash interest rates or make other loan modifications to entice borrowers into resuming payments.
Its biggest deal has been with the Federal Deposit Insurance Corporation, which it paid $43.2 million for $560 million worth of mostly delinquent residential loans left over after the failure last year of the First National Bank of Nevada. Many of these loans resemble the kind that Countrywide once offered, with interest rates that can suddenly balloon. PennyMac’s payment was the equivalent of 38 cents on the dollar, according to the full terms of the agreement.
Under the initial terms of the F.D.I.C. deal, PennyMac is entitled to keep 20 cents on every dollar it can collect, with the government receiving the rest. Eventually that will rise to 40 cents.
Phone operators for PennyMac — working in shifts — spend 15 hours a day trying to reach borrowers whose loans the company now controls. In dozens of cases, after it has control of loans, it moves to initiate foreclosure proceedings, or to urge the owners to sell the house if they do not respond to calls, are not willing to start paying or cannot afford the house. In many other cases, operators offer drastic cuts in the interest rate or other deals, which PennyMac can afford, given that it paid so little for the loans.
PennyMac hopes to achieve a profit of at least 20 percent annually, and it is actively courting other investors to build its portfolio, which now consists of $800 million in loans, to as much as $15 billion in the next 18 months, executives said. For the borrowers whose loans have ended up with PennyMac, it can translate into an extraordinary deal.
The Laverdes, of Porter Ranch, Calif., had fallen three months behind on their mortgage after sales at a furniture store owned by the family dipped in the economic crisis. Margarita Laverde and her husband were fearful that they might need to move their four children, three dogs and giant saltwater aquarium into a cramped apartment, leaving behind their dream home — a five-bedroom ranch on a suburban street overlooking the San Fernando Valley.
But a PennyMac representative instead offered to cut the interest rate on their $590,000 loan to 3 percent, from 7.25 percent, cutting their monthly payments nearly in half, Ms. Laverde said.
“I kept on asking, ‘Are you sure this is correct? Are you sure?’ ” Ms. Laverde said. Even with this reduction, PennyMac stands to make a profit of at least 50 percent, a company official said.
Ms. Laverde could not care less that executives at PennyMac used to work at Countrywide.
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16) Job Losses Accelerated in February, Index Indicates
By REUTERS
March 5, 2009
http://www.nytimes.com/2009/03/05/business/economy/05econ.html?ref=business
Private sector job losses increased in February, according to a report by ADP Employer Services on Wednesday that came in worse than economists’ expectations.
ADP said private employers cut 697,000 jobs in February compared with a revised 614,000 jobs lost in January. The January job cuts were originally reported at 522,000.
Economists had expected 610,000 private-sector job cuts in February, according to the median of 23 forecasts in a Reuters poll, which ranged widely from a drop of 730,000 to losses of 500,000.
The forecasts in the poll ranged widely from a drop of 730,000 to losses of 500,000.
“I was actually expecting it to be a little worse. Every month we’ve had data come in worse than expected,” Dan Faretta, senior market strategist at Lind-Waldock in Chicago, said.
“Until we get positive news about housing or industry or anything like that, the numbers will continue to get worse,” Mr. Faretta said. “The numbers keep weighing on all the markets.”
The ADP release comes ahead of Friday’s non-farm payrolls report from the government, which gives a more comprehensive picture of the labor market.
Economists expect the payrolls report to show the economy shed 648,000 jobs in February and the unemployment rate rose to 7.9 percent from 7.6 percent.
In another economic report, the service sector shrank further in February but by less than expected, according to a report released Wednesday.
The Institute for Supply Management said its nonmanufacturing index came in at 41.6 in February versus 42.9 in January.
The level of 50 separates expansion from contraction in the index, which dates back to July 1997.
Economists had expected a reading of 41.0, according to the median of 69 forecasts in a Reuters poll ranging from 37.0 to 44.0.
The service sector represents about 80 percent of economic activity, including businesses like banks, airlines, hotels and restaurants.
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17) A.F.L.-C.I.O. to Support Nationalizing Banks
By STEVEN GREENHOUSE
March 4, 2009
http://www.nytimes.com/2009/03/04/business/04private.html?ref=business
MIAMI BEACH — The A.F.L.-C.I.O.’s executive council will call on the Obama administration on Wednesday to speed the nationalization of problem banks to stimulate lending and lift the sagging economy.
The labor federation, a lobbying powerhouse that represents 10 million workers, will thus become one of the first groups — and certainly the most powerful — to call for moving more aggressively on nationalization, both to counter Republican and business cries against it and to press the Obama administration not to vacillate over such a move.
A.F.L.-C.I.O. officials asserted that the administration’s practice of giving billions of dollars in dribs and drabs to distressed banks had failed to restore their solvency, leaving them as zombie banks that largely refrain from lending, thereby contributing to the economy’s decline.
The executive council is scheduled to approve a statement that criticizes the Obama administration for indulging shareholders of distressed banks by not nationalizing the banks to speed the cleanup of their balance sheets.
“We believe the debate over nationalization is delaying the inevitable bank restructuring, which is something our economy cannot afford,” a draft of the council’s statement said.
The labor leaders also asserted that the Obama administration, like the Bush administration, had failed to obtain fair value for the tens of billions it had invested in distressed banks.
“By feeding the banks public money in fits and starts, and asking little or nothing in the way of sacrifice, we are going down the path Japan took in the 1990s — a path that leads to ‘zombie banks’ and long-term economic stagnation,” the draft statement said.
The statement makes clear that the group wants to add its political and lobbying muscle to calls by Joseph E. Stiglitz, Nouriel Roubini and other economists in favor of nationalization.
Labor leaders said the administration appeared to be vacillating on nationalization partly out of fear of Republican attacks that it was adopting socialist policies.
Banking executives have spoken out against nationalization, saying it would hurt shareholders and insisting they can nurse their banks back to health.
Some Obama officials voice fears that it will be hard to manage nationalized banks and that nationalization could drive down the shares of other financial institutions by generating fears that additional banks will be taken over.
A.F.L.-C.I.O. leaders said they did not favor long-term nationalization of banks, but rather temporary trusteeships in which the government would take a controlling stake in a bank, clean up its balance sheet, then spin it off.
“The result should be banks that can either be turned over to bondholders in exchange for bondholder concessions or sold back into the public markets,” the executive council’s draft said.
James A. Baker, the Treasury secretary under President Ronald Reagan, wrote in The Financial Times on Tuesday that temporary nationalization might be necessary to inject public funds into problem banks.
“I abhor the idea of government ownership — either partial or full — even if only temporary,” he wrote. “Unfortunately, we may have no choice. But we must be very careful. The government should hold equity no longer than necessary to restructure the banks, resume normal lending and recoup at least a portion of taxpayer investment.”
The labor leaders said that 43 percent of the nation’s bank assets were held by four institutions — Citigroup, Bank of America, Wells Fargo and JPMorgan Chase. One A.F.L.-C.I.O. financial expert said Citigroup and Bank of America were insolvent and candidates for quick nationalization.
“When these institutions are paralyzed, our whole economy suffers,” the labor statement said, adding, “However, government interventions must be structured to protect the public interest, and not merely rescue executives or wealthy investors.”
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