Wednesday, March 3, 2010

GM recall - 1.3 million Chevrolets and Pontiacs

NEW YORK ( -- General Motors has recalled 1.3 million Chevrolet and Pontiac models in North America for power steering failures that are tied to 14 crashes and one injury in the United States, the company said Tuesday.

The recall affects 2005-2010 Chevrolet Cobalt and 2007-2010 Pontiac G5 models sold in the United States, 2005-2006 Pontiac Pursuit vehicles sold in Canada, and 2005-2006 Pontiac G4 models sold in Mexico.

Detroit-based GM told the National Highway Traffic Safety Administration about the recall Monday after concluding its own investigation first launched in January 2009.

The NHTSA opened a separate investigation on 905,000 U.S. Cobalt models in January 2010 after receiving more than 1,100 complaints on power steering failures, 14 crashes and an injury.

GM vice president of quality Jamie Hresko said the investigation revealed that the problem develops over time, and is more likely to occur in vehicles whose warranty has expired.

GM spokesman Alan Adler told CNNMoney that the condition tends to impact vehicles that have been driven 20,000 to 30,000 miles.

While the company is developing a solution to fix the problem, Hresko said drivers can maintain control of the vehicle even after losing the power steering function.

"Recalling these vehicles is the right thing to do for our customers' peace of mind," he said. "While greater steering effort under 15 mph may be required, if the customer experiences loss of power steering assist, it is important to note that the vehicle can still be safely controlled because the customer can still steer the vehicle."

He noted that when the power steering feature fails, a chime will sound and the "Power Steering" message will display to alert drivers.

Bunning Fight Over Jobless Bill Shows Senator’s Contempt for GOP Leader

The gruff, irascible style of Sen. Jim Bunning may not have earned him any friends in the Senate but it could give the retiring lawmaker the last laugh as he victoriously spits in the eye of colleagues after creating a political firestorm over jobless benefits that has dismayed Republicans and delighted Democrats.

The gruff, irascible style of Sen. Jim Bunning may not have earned him any friends in the Senate but it could give the retiring lawmaker the last laugh as he victoriously spits in the eye of colleagues after creating a political firestorm over jobless benefits that has dismayed Republicans and delighted Democrats.

Bunning, 79, a baseball Hall of Famer who rubs even his fellow party members the wrong way, is retiring at the end of the current session, which gives Senate leaders little leverage to try to control him.

The freedom has led to a five-day fight over a jobless benefits bill from which Bunning may emerge bruised but victorious. It also has forced members to take a good look at inconsistencies in their own legislative exploits.

Senate Majority Leader Harry Reid struck a deal with Bunning late Tuesday to end the standoff over the extension of jobless benefits

The legislation has caused heartache for members of Bunning's party as Democrats have made him a poster boy for GOP obstructionism. But it has also frustrated Democrats who've been forced to legislate without budget gimmicks.

Either way it's no skinned nose for Bunning, whose long-playing and well-publicized feud with his fellow Kentucky colleague, Senate Minority Leader Mitch McConnell, boiled over on Tuesday.

Bunning has been elected twice to the Senate but was seen as vulnerable in this year's election after nearly losing his 2004 re-election bid to a little-known Democrat from eastern Kentucky.

McConnell refused very publicly to support Bunning for a 2010 bid, and Bunning has felt unrestrained in his contempt since then.

In May 2009, Bunning slammed McConnell for Republican losses in the Senate.

"Do you realize that under our dynamic leadership of our leader, we have gone from 55 and probably to 40 (Senate seats) in two election cycles, and if the tea leaves that I read are correct, we will wind up with about 36 after this election cycle," he told the Louisville Courier-Journal.

"So if leadership means anything, it means you don't lose … approximately 19 seats in three election cycles with good leadership," he said.

Later, when Bunning announced he would not seek another term, he issued a scowling statement, noting that the lack of support has led to a dearth in funding for his campaign.

"Over the past year, some of the leaders of the Republican Party in the Senate have done everything in their power to dry up my fundraising. The simple fact is that I have not raised the funds necessary to run an effective campaign for the U.S. Senate," he said at the time.

Now a lame-duck, the Kentucky Republican lashed out once more -- single-handedly blocking stopgap legislation to pay for a temporary extension of jobless and COBRA benefits as well as transportation funding and money to shield doctors from Medicare cuts.

As the curtain came down on the 12th act in the latest legislative tussle -- another blocked vote by the senator -- Bunning offered one more shot at McConnell, reading an apparent letter from one of his constituents in which he railed against what he called the hypocrisy in Washington.

"It's too bad Senator Mitch McConnell and some of the elected officials on your side of the aisle do not have the backbone of your sense of decency when it comes to keeping their promises to the American people," Bunning said, reading the missive.

As the end of the feud appeared near, one fiscal hawk emerged from the party shell and praised Bunning for his nerve.

"Senator Bunning was right to address this problem and I commend him for it, and I hope our colleagues will stop the hypocrisy," said Sen. Jim DeMint, R-S.C. "I want to thank Senator Bunning for his courage and clarity."

Bunning finally relented on seeking alternative ways to pay for the deficit-inducing $10 billion bill as Reid, who has fiercely duked it out with Bunning over his opposition to the bill, worked on a compromise proposal

Sources told Fox News the compromise came after Republican leaders, reaching their limit on what they could endure from the political fallout over Bunning's actions, approached Bunning for a resolution to the impasse.

In sporting form, Bunning said the GOP leadership had not been involved with the compromise.

"I decided that we ought to try our best to get a compromise and pay for it, that the other side would agree to," he told Fox News.

Republicans will offer amendments -- Bunning's demands -- to pay for the temporary extension of benefits for 400,000 unemployed workers. Unobligated stimulus money will pay for the costs of the bill and an across-the-board cut in discretionary spending

The temporary extensions, if passed, will be retroactive to Monday. No one will lose any benefits as a result and Bunning can claim that he won the fiscal responsibility battle.

But while Bunning may also have won the internecine feud with McConnell, McConnell will be in the Senate next year without his Kentucky colleague, and by that standard, the minority leader may have won the war.

Fox News' Trish Turner contributed to this report.

Friedmanism at the Fed

Ongoing Congressional investigations into the AIG bailout have put the incestuous and murky relationship between the Federal Reserve and Wall Street in the spotlight--and put Treasury Secretary Timothy Geithner and Fed chair Ben Bernanke in the hot seat. Calls for Geithner's resignation regularly reverberate inside the Capitol, and Bernanke's recent reappointment was opposed by thirty senators, including Republican John McCain and independent Bernie Sanders. Critics from both sides of the aisle fault Geithner and Bernanke for mismanagement, unnecessary secrecy and undermining Congressional oversight. But neither of them has been the target of questions about gaming the system for personal financial gain.

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That distinction belongs to Stephen Friedman, the former chairman of the board of the New York Federal Reserve Bank and a member of the board of directors of Goldman Sachs. Through those two posts, Friedman may have had access to privileged information about the extent of Goldman's exposure to AIG and the opportunity to profit from the Fed's bailout of the beleaguered insurance giant. While he was serving on both boards, Friedman purchased 52,600 shares of Goldman stock, more than doubling the number of shares he owned. These purchases have since risen millions of dollars in value--and raised allegations of insider trading.

Friedman's purchases were exposed by the Wall Street Journal in early May 2009, and within days he resigned as chair of the New York Fed. His resignation letter claimed that although he had acted "in compliance with the rules," the suggestion of impropriety had become a "distraction" from the important work of the Federal Reserve. In a press release, New York Fed executive vice president and general counsel Thomas Baxter also said that Friedman's acquisition of Goldman shares "did not violate any Federal Reserve statute, rule or policy."

But if Friedman and Baxter were hoping to extinguish scrutiny over Friedman's Goldman buy and limit any collateral damage to the Fed, it looks like they are out of luck. In late January, House Oversight Committee chair Edolphus Towns called in Geithner, former Treasury Secretary Henry Paulson, Baxter and Friedman to testify about the AIG bailout. Friedman's Goldman deal was a significant line of inquiry.

And now, at least one member of the committee, Massachusetts Representative Stephen Lynch, is calling not just for continued Congressional investigation but for other enforcement agencies to look into possible insider trading and other matters surrounding the AIG bailout. In an interview with The Nation, Lynch said that he intends to meet with the SEC to see "whether or not they might be helpful with this." Lynch also suggested that the Justice Department's Financial Fraud Enforcement Task Force should be investigating Friedman's Goldman purchases as well.

A full investigation would not only determine if Friedman violated the Fed's rules; it would also shed light on the arcane regulations and conflicts of interest that riddle the Federal Reserve system, an important public service, since Congress is debating whether the Fed should serve as the leading regulator of systemic risk in our economy. Indeed, what we already know suggests that even if Friedman acted "in compliance with the rules," the rules were inadequate and easily subverted and therefore did little to guarantee transparency and accountability.

That Friedman was simultaneously chair of the New York Fed and a board member of Goldman Sachs was itself a violation of Fed policy. As a "Class C" director who is on the New York Fed board to represent the public, Friedman was barred from being on the board of a bank holding company or even owning stock in a bank holding company. This policy came into play in September 2008, when Goldman converted from an investment bank to a bank holding company (the policy did not apply to investment banks). Friedman was not only on the board of Goldman but also held 46,000 shares in the company. So he had to make a choice: resign from the Fed or resign from Goldman Sachs and sell the shares he owned.

But Friedman did neither. Instead, to allow him to maintain his roles at the Fed and Goldman, New York Fed officials, led by then-president Geithner, asked the Federal Reserve board of governors in Washington for a waiver, which was granted on January 21, 2009.

In the meantime, the New York Fed made its now-infamous decision--on November 9, 2008--to pay AIG counterparties like Goldman Sachs, Bank of America and Merrill Lynch full value for insurance on mortgage-backed securities that had tanked when the housing bubble burst. It was a $62 billion deal, and Goldman was the greatest domestic beneficiary, receiving an estimated $13 billion. Goldman had been locked in a dispute with AIG since 2007 over the value of those securities--a dispute New York Times reporters Gretchen Morgenson and Louise Story described as "one of the most momentous in Wall Street history"--until the Fed stepped in and sided with Goldman.

Despite demands from Congress and the media, neither the Fed nor AIG disclosed the names of the banks or the amount of money each had received through the bailout until March 15, 2009, when AIG finally did so. While the public was left in the dark, Friedman nearly doubled his Goldman holdings by purchasing 37,300 shares for about $3 million. Friedman made that purchase on December 17, 2008, just over a month after the Fed decided to pay Goldman and the other banks full value for the insurance on mortgage-backed securities. Since he had yet to receive the waiver, his purchase of additional shares occurred at a moment when he was still prohibited from owning the shares he already possessed and was thus out of compliance with Fed policy.

On January 22, 2009--just one day after the Federal Reserve granted Friedman the waiver--he purchased another 15,300 shares of Goldman. According to the Wall Street Journal, the "million-dollar purchase brought his holdings to 98,600 shares." On March 16, 2009--one day after the public was finally told the identities of the banks and the amount of money each had received from the Fed--Goldman was trading at approximately $94 per share. A week later the stock price had risen to just under $112. As of late February Friedman had gains of approximately $4.2 million on those post-bailout stock purchases.

The fact that Friedman's actions augmented rather than diminished the conflict of interest was not lost on members of the House Oversight Committee. "At a time when Mr. Friedman was prohibited from owning Goldman Sachs stock, he proceeded to buy 37,000 more shares of it anyway," says committee chair Edolphus Towns. "That strikes many Americans as unjust, unwise and unfair."

At the hearing, Representative Lynch also homed in on that fact. "Here's the problem," said Lynch. "As a member of the board of governors you're making decisions on matters that directly affect Goldman Sachs, and you're a former shareholder, current shareholder, and then you buy 37,000 more shares of that company that you're overseeing?"

"Yeah," replied Friedman.

After the hearing Lynch told me that Friedman was "obviously in a position of extreme conflict and was given full opportunity for inside trading."

"I mean, think about it," Lynch said. "He asks for a waiver; he knows there's a conflict. Then he gets the information that the Fed is going to pump this money into AIG and the positions are going to be covered 100 cents on the dollar. And so with that information, what would you do? Buy another 37,000 shares, baby."

Various spokespeople and others close to Friedman insist that everything he did was aboveboard and that he is a victim of a media frenzy and politicians with their own agendas. None of these people allowed their names to be used for this article. Friedman did not respond to an offer for an interview.

Friedman testified that he had consulted with Goldman counsel before the purchase in accordance with the firm's policy. He also said he was informed by New York Fed officials that "the rules were in abeyance" while the waiver was pending, so he could continue "chairing the board." But Friedman never informed the New York Fed of his intention to buy more Goldman shares, only of his existing ones. Fed officials there were surprised by both stock purchases as well as the size of the transactions, according to sources familiar with the matter.

An attorney for Friedman said he met any reasonable standard one could expect from an investor and that any financial impact from AIG payments to counterparties was reflected in Goldman's fourth-quarter earnings report, issued December 16, 2008. But that report does not disclose the amount of money Goldman received from the Fed. Moreover, Goldman has said repeatedly that the payments from AIG were "immaterial" because the firm had purchased insurance to cover any losses arising from an AIG default. But at a time when the financial system was on the verge of collapse, the value of that insurance could not have been certain.

"Goldman might have been fully hedged, but how good is that hedge if the counterparty in those hedges was not solvent or fully hedged and so on?" asks James Cox, a securities law expert and professor at Duke Law School. One of the parties must have been exposed, he says. "So would not knowledge that the first domino would not fall be inside information?"

Perhaps most significant, an attorney for Friedman confirmed that Friedman and other Goldman board members were briefed regularly in late 2007 and early 2008 regarding how much money AIG owed Goldman. This is an important piece of information because Friedman can't claim complete ignorance about how much money was at stake when AIG collapsed and thus how much the Fed's intervention would benefit Goldman. One question that Friedman still needs to answer under oath is: What exactly did you know about Goldman's exposure to AIG when you purchased 37,300 shares in December 2008 and another 15,300 shares in January 2009?

Goldman Sachs declined to comment when asked this very question. According to a Fed spokesperson, Friedman did not have access to confidential information regarding AIG stemming from his tenure on the New York Fed's board of directors. An attorney for Friedman wrote in an e-mail: "The facts demonstrate that Steve Friedman was not aware of any undisclosed material information relating to Goldman's exposure to AIG on December 17, 2008, when he purchased Goldman shares."

Another spokesperson directed me to Friedman's written Congressional testimony, in which he attempts to make the case that when he made his purchases, the public knew that Goldman had been paid full value on its contracts with AIG and that it was a good time to buy Goldman. He points to newspaper articles speculating that Goldman was one of AIG's counterparties and on the amount of exposure Goldman had to AIG. He cites financial analysts who rated Goldman stock a "buy." He quotes Goldman Sachs CFO David Viniar on public earnings calls in the third and fourth quarters of 2008 describing the firm's exposure to AIG as "immaterial" because of "risk management with appropriate hedging strategies."

Friedman's testimony reads: "At the time of my purchases, it was widely known and reported--through various public statements by Goldman Sachs officials, in numerous contemporaneous newspaper articles, in multiple investment analysts' reports, and in the November 10 Federal Reserve Board and AIG press releases...that Goldman Sachs was a counterparty to AIG and had been repaid at par on November 10."

But Friedman's claim--that newspaper articles, ratings from individual analysts and public statements from Goldman's CFO are the equivalent of being briefed on what Goldman said it was owed by AIG--rings hollow. The Fed and AIG press releases issued in November didn't reveal that the banks were paid full value. That information wasn't disclosed until SEC filings were released in December, and the identity of the banks and how much each received wasn't disclosed until March 2009.

And what of the Fed's role in all of this? If Goldman really was fully protected by hedging instruments--so that it had no exposure whatsoever to AIG--then why did the Fed pay full value on those securities?

"Friedman's explanation does raise questions about the full-payment justifications offered by Secretary Geithner and others," says Cox. "Namely, that to pay less would have caused losses throughout the system and create havoc."

"These [securities] are in the vortex--these are at ground zero of all this," says Lynch. "They've got huge positions. And what happens to Goldman if AIG is allowed to go into bankruptcy? The market was pricing those derivatives at 50 percent of value, yet they were paid 100 cents on the dollar. There's just no way in hell they would have received that in the bankruptcy process. So here's someone sitting here with this great inside knowledge and capitalizing on it. Maybe it's just too obvious."

The government was so intertwined with Friedman's stock purchases, one can imagine there is significant pressure to move past any questions about insider trading. That's why it's so critical that the Oversight Committee continue its investigation.

Finally, it's worth noting that before Friedman resigned, he finished his job as chair of the search committee charged with finding a replacement for Timothy Geithner at the New York Federal Reserve Bank: William Dudley, another Goldman alum.

U.S. Postal Service might end Saturday delivery to help close $238 billion gap

The U.S. Postal Service estimated Tuesday that it will lose $238 billion in the next decade if lawmakers, postal regulators and unions don't give the mail agency more flexibility in setting delivery schedules, price increases and labor costs.

Estimates also predict that letter carriers will deliver 150 billion pieces of mail in 2020, a drop of about 26 billion pieces from last year. Postmaster General John E. Potter plans to press lawmakers and the Postal Regulatory Commission in the coming weeks to eliminate Saturday mail deliveries and allow the mail agency to raise prices beyond the rate of inflation, if necessary.

"We intend to be around for decades and centuries to come," Potter told a meeting of regulators, congressional staffers and major mail customers Tuesday. "These are the first steps that are necessary to make sure that that occurs."

Although public polling suggests that a majority of Americans support cutting Saturday service to save money, lawmakers and union leaders signaled Tuesday that they will not rubber-stamp the move.

Fredric V. Rolando, president of the National Association of Letter Carriers, said his 300,000 members will oppose plans to cut weekend service.

"I do not believe that weakening our commitment of six-day service to the public will enhance the long-term position of the Postal Service as a critical element in our nation's economic infrastructure," Rolando said from the AFL-CIO conference in Orlando.

Sally Davidow, a spokeswoman for the American Postal Workers Union, said the Postal Service should focus first on persuading Congress to reverse a 2006 law that requires the mail agency to make prepayments to its retiree health accounts. The payments cost about $5 billion annually, but eliminating them should help close the gap, Davidow said. The APWU represents more than 330,000 postal clerks, truck drivers, mechanics and custodians.

Potter agrees that the agency needs to end the prepayments but has said those cuts will not do enough to end the agency's grave financial situation.

Sen. Thomas R. Carper (D-Del.), who chairs a subcommittee on postal issues, didn't explicitly support Saturday cuts or price increases but backed Potter's efforts.

"Management must be allowed to make the business decisions they need to stay competitive and viable in the years to come," Carper said in a statement. "As we have seen, it is not productive for Congress to act like a 535-member board of directors and constantly second guess these necessary changes."

Rep. Jason Chaffetz (Utah), the ranking Republican on the House subcommittee on postal issues, said the Postal Service should consider eight postal holidays on the slowest delivery days each year instead of cutting Saturdays.

"Saturday is an important delivery day," Chaffetz said. "Everything from bank statements and dealing with your bills to the social component of going down to the post office, I think it's an important part of what they do."

British people told by opposition politician to start arming themselves for a class war

Title: British people told by opposition politician to start arming themselves for a class war

By: Edmund Conway
Date: 02/28/2010

The recession has increased the wealth gap to dangerous levels, and George Osborne does not seem serious about tackling it, says Edmund Conway.

If you don’t work in the City or in economics, you may not have heard of the annual Mais lecture, which was delivered last night by George Osborne. But it’s a big deal, arguably the most important set-piece speech in the Square Mile calendar. And only once before has City University, the host, deigned to invite an opposition politician primed for election to deliver it.

On that occasion, the young thrusting pup at the lectern derided a government in crisis, its finances in a state, its economic reputation in tatters. He promised to cut the deficit, to intervene in markets where necessary, and laid out a “new framework” for running the economy. That man was Tony Blair.

Last night, George Osborne became the second opposition politician to deliver the lecture. His title? “A New Economic Framework”. That aside, the difference could hardly be more stark. In 1995, the economy was in recovery. With the deficit past its peak, the great transformation in macro-economic management had already taken place, when the collapse of the Exchange Rate Mechanism forced Britain to start targeting inflation rather than exchange rates.

Today, the economy is in a far more damaging spiral. The first leg of the financial and economic crisis, which stemmed from excessive private borrowing and the subsequent collapse of the banking industry, is over. The second leg, characterised by a crisis of sovereign debt in even the richest economies, is only just beginning. The Bank of England’s inflation-targeting approach is under question from sources as authoritative as the International Monetary Fund. The world economy looks increasingly vulnerable to a “double-dip”, tipping back into recession or stagnation rather than bouncing back to health.

More important, both political parties are committed to spending cuts of a scale never before experienced by the public. Ignore the fuss about economists’ letters: based even on Labour’s plans for public spending, the next half-decade will be the first time in modern history that a government has imposed five successive years of real spending cuts. The question is not about timing (the Tories would cut earlier and slightly more) but over who will push the cuts through. Labour perennially disappoints and misses its fiscal targets. What most recommends the Tories is the pedigree that suggests they will at least approach the task with some relish.

All the same, Osborne is terrified of imposing such deep and painful cuts. He privately despairs that he will end up as the most unpopular politician in modern history. Which helps explain his plan, spelt out last night, to set up a three-man Office for Budget Responsibility to advise him on how far to cut spending. The hope is that the OBR will attract the opprobrium when state-sector workers are laid off or given pay cuts, when VAT is raised, when the retirement age is increased, and when public-sector pensions are finally tackled.

However, as good a start as the lecture made, it failed to address the scale of the social task facing the Tories. Osborne mentioned the Conservatives’ plans to tackle inequality, but only as an afterthought. And that is precisely what the divide between rich and poor has been for decades: a worthy economic topic that is too big, nebulous and intractable to tackle. I suspect that this is about to change. We have known for some time that income disparities have climbed to the highest level since the Thirties. What is new, and worrying, is that whereas this gap narrowed as a consequence of the Great Depression – as the wealthiest lost money and the poorest benefited from the newly created social safety nets – this time the crisis has served to widen the chasm, not least because the plutocratic bankers were bailed out with taxpayers’ cash.

In part, inequality is a natural consequence of globalisation. When a company shifts factories overseas, the shareholders make more money, but the workers lose their jobs. Optimists claim that this wealth should trickle down to those unemployed workers as the shareholders go out and spend more, but reality has proved otherwise. According to Albert Edwards of Société Générale, homeowners have been distracted from noticing this disparity by housing bubbles that convinced them they were becoming wealthier. But that fantasy has been obliterated by the crisis.

The poorest today are, in absolute terms, less destitute than before, able to afford food, shelter, even satellite TV. But the disparity between them and the richest has risen. It is not merely, as Richard Wilkinson and Kate Pickett point out in their book The Spirit Level, that this damages health and encourages crime; in times of austerity, inequality can tear apart the social fabric. Take Greece, where the most frequent chant in this week’s riots was: “Make the plutocrats pay!”

So Ed Balls’s plan to pitch this election as a class war is, I’m afraid, on the button. Class, money and privilege will be unavoidable issues during the next parliamentary term. Rather than ignoring them, the Tories must take action. Better to start thinking about free-market reforms that share the wealth more equitably than to leave it to the Left to suggest that taxes on the wealthy are the only solution.

New ghost towns: Industrial communities teeter on the edge

RAVENSWOOD, W.Va. — When Henry Kaiser arrived 55 years ago, this place was no place — "a rural problem area," the government called it, so poor and isolated that the population had dropped 15% since 1940.

That all changed after Kaiser, the industrialist who'd turned out ships and planes at a record pace in World War II, built the nation's largest consolidated aluminum works here on the banks of the Ohio River.

The plant paid Tim Shumaker his first living wage, and he won the right to keep it two decades ago after his union was locked out for 19 months.

Today, that victory seems hollow. Shumaker, 49, has been laid off. Part of the vast aluminum complex is closed, and the rest is for sale — its orders down, its workforce reduced, its future uncertain. Shumaker stands at the locked plant gate and, after a year without work, worries what's next for him and his community. "The way things are going," he says, "there's not going to be anything here."

Ravenswood, with 4,000 people and one big factory, is like many towns in the USA where things still are made: caught in a winter between recession and recovery, hoping the latter will arrive before the former kills the last decent blue-collar job.

If the rest of the aluminum works closed, "would this become a ghost town?" muses Jim Frazier, principal of the Henry J. Kaiser Elementary School.

Whether it's textiles in the Carolinas, paper in New England or steel in the Midwest, most industrial cities and mill towns "are on pins and needles," says Donald Schunk, an economist at Coastal Carolina University. "Day to day, week to week, any manufacturing facility seems vulnerable. People don't know if they'll be there."

That's true in:

• Georgetown, S.C. (pop. 9,000), where the closing of the local steel mill last year left International Paper as the last major private employer.

• Madawaska, Maine (pop. 4,000), where workers voted last month to take an 8.5% wage cut to keep the financially strapped paper mill going.

• Glenwood, Wash. (pop. 500), where flat lumber prices and rising land prices are crippling the forest products industry.

Anxiety over possible layoffs or closings can disturb workers as much as the real thing, experts say. Harvard psychologist Daniel Gilbert says it's uncertainty that really bothers people: They feel worse when they think something bad might happen than they do when they know it will happen.

Ravenswood knows the feeling. It's waiting for the other shoe to drop.

The aluminum works south of town has two parts: a reduction plant (or smelter), where ore is heated to 1,800 degrees to make aluminum; and a fabrication plant, where aluminum is rolled or stretched into sheets or plates. Since 1999, the plants have been separately owned.

A year ago last month, Century Aluminum closed the reduction plant, laying off Shumaker and about 650 other workers. The fabrication plant, owned by Rio Tinto Alcan, still employs more than 1,000.

What if the Alcan plant, which bought its raw aluminum from Century, also were to close?

That worries almost everyone, including Frazier at Kaiser Elementary. Of the school's 160 families, 37 have parents who worked at Century; many others have breadwinners at Alcan.

Kate Bronfenbrenner, a Cornell labor relations professor who studied the 1990 Ravenswood lockout, says that if the second plant closes "that town would die." Other communities sustained by manufacturing face a similar fate, she adds: "We had ghost towns in the past. We could have them again."

The difference is that people could leave a ghost town — miners to work new veins, farmers to till fresh land, merchants to move closer to road or rail.

Today, Tim Shumaker sees no such options. In past layoffs, he always found work somewhere; now there seems to be none anywhere.

So, like almost everyone else here, he's staying put, wondering whether Ravenswood could become a new kind of ghost town: a place where people stay, because they have nowhere else to go.

Rise and fall

Kaiser's Ravenswood plant created a middle class where there was none. When the United Steelworkers Union was voted in after the plant opened in 1957, the hourly wage jumped from $1.78 to $3.25.

Three decades later, the aluminum works was sold to a group that secretly included Marc Rich, an American commodities trader who was living in Switzerland to avoid charges of violating the U.S. trade ban with Iran.

According to a history by Bronfenbrenner and Tom Juravich, working conditions at the plant deteriorated. The company forced workers into double shifts — sometimes for several days in a row — in the 100-degree heat of the "pot rooms," where molten aluminum is made.

When the union contract expired, the company locked the workers out.

Organized labor had been losing such battles, but at Ravenswood the Steelworkers launched an innovative "corporate campaign" that went beyond the picket line.

The union mobilized pressure from foreign unions and governments, persuaded beer companies to stop buying Ravenswood aluminum and lobbied the state Legislature to investigate the company. In 1992, the company settled, agreeing to a new contract with higher pay and limits on mandatory overtime.

By the end of 2008, though, energy prices had risen, foreign competition had increased, and the price of aluminum had dropped 50% in a few months. On Feb. 4, 2009, the smelter closed.

Workers gathered in the high school gym. Gov. Joe Manchin, a pro-union Democrat, came up from Charleston. "The world's changing," he said.

In the America where things are made, the recession has been a depression. According to a new Northeastern University study, one in every six blue-collar industrial jobs have disappeared since 2007, matching the drop in overall employment in the Great Depression.

Last year, about 1.3 million factory jobs vanished, including Shumaker's. For the first time, the government announced in January, most union members are government employees, not private-sector workers.

One-horse towns such as Ravenswood risk losing their reason for being, says Juravich, who teaches about labor at the University of Massachusetts. Without a hospital or university campus or county seat, "they're one plant shutdown from oblivion."

Sometimes oblivion is a ghost town with tumbleweed blowing down Main Street and the doors of the Last Chance Saloon swinging in the desert wind. But most 21st-century ghost towns will not be deserted.

People, many unemployed or underemployed, will fill the bars, stoops, corners, clinics, jails and social welfare offices.

An industrial town makes products that bring wealth into a community; a post-industrial ghost town has a zero-sum economy — people in marginal jobs, "serving and paying each other," Bronfenbrenner says.

At best, the new industrial ghost towns become places for low-rent homes for long-distance commuters. At worst, they slowly empty out.

Uncertainty and anxiety

At first, some Century workers — who as a group averaged $51,000 in pay per year — regarded the layoff as a vacation. Besides unemployment compensation, 20-year veterans such as Shumaker got two years of layoff pay (about $400 a month) and continued health coverage (no premiums, no deductible and a $10 co-pay for office visits).

A year later, some benefits are expiring, savings are running low, and people are beginning to hurt. The local food bank's caseload has tripled. The pawn shop's business has doubled. "I'm warm and dry," Shumaker says, "but I don't have a dime to my name." He's behind in the payments on the three-bedroom house he shares with his wife and teenage son.

He has pawned some tools. Instead of stopping for a burger at lunchtime, he goes home and fixes a peanut butter-and-jelly sandwich. He drinks less milk, eats less meat, buys less gasoline. He drives a dented Ford pickup with 150,000 miles on it.

What's most striking about Ravenswood, however, is not the material deprivation but the psychological distress, an anxiety about the future that tests faith itself. "I try to explain that God has not abandoned us," says Scott Mapes, pastor of the Church of the Nazarene, where yearly giving has dropped from $180,000 to $150,000.

Shumaker does not lack daily sustenance; he lacks a future and a purpose. "I'm not depressed or anything, but I can't seem to get started in the morning," he says. "I didn't get out of bed today until 9 a.m."

He's wearing a black T-shirt with pictures of a U.S. flag and a buffalo and the words "Roam Free." Problem is, he can't. The old rule — go where the work is — no longer applies, unless maybe you're a nurse or a teacher.

There's constant speculation that Century might reopen. Shumaker's not optimistic.

Others aren't waiting for a call back to work. Hundreds are taking advantage of a federal program that pays $20,000 for education or training for workers who lose jobs because of foreign competition.

Dave Guthrie, 51, says he's glad he was laid off because now he has the time, money and motivation to go to college. He wants to be a traveling nurse, working short-term contracts around the country, far from what he calls the plant's "us-vs.-them" labor-management dynamic.

He sees Ravenswood as a nascent ghost town: "Industrial workers are dinosaurs. In the future, it's going to be service jobs and electronics. … Eventually, people will start leaving here. It's that or a minimum-wage job at Wal-Mart."

Tim Shumaker is not going anywhere. On another slow, jobless day, he sits in the union hall, which is a sort of shrine to the great lockout. There's a picture of a worker who died on the job in 1990; a union-issued Marc Rich "wanted" poster; a photo collage of members' children, under the words "Why We Fight" and "Labor's Future."

There's also an aerial photo of the sprawling colossus that sucked up more power than a city and pumped out 500 tons of metal a day. For a half-century, the hottest place in West Virginia; now, stone cold.

"It's disheartening," he says. "I enjoyed working there — even the pot rooms. I miss it."

CNN: This is Hawaii.

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另一方面,研究智利地質的英國地球科學專家裡特布羅克表示,有些改變比較明顯,多個島移動了,“智利第二大城市康塞普西翁附近的聖瑪麗亞島(Santa Maria Island)或因今次地震上升了兩米。那裡的岩石證據,顯示過去的地震曾把島推高”。