The Economy Today: Chapter 11

News from Detroit, Orlando, Fort Worth, Hanford and elsewhere

National headlines today focus on the news that General Motors will declare bankruptcy. The move, the largest industrial bankruptcy in U.S. history, will give the government a 60 percent stake in the company. The Los Angeles Times dubs the automaker “lately a stark reminder of the nation’s failings.” The Wall Street Journal, calling the bankruptcy the “humbling of an American icon,” cites the challenges intrinsic to the reorganization, “ranging from legal challenges to the uncertainty of when consumer demand for new cars will rebound,” as well as how long it will take to liquidate the unwanted parts of G.M. The New York Times takes a look at what the “shrunken G.M.” will look like—it will, among other things, shed 21,000 union workers and close twelve to twenty factories.

The Detroit Free Press reports on public polling showing that only 21 percent of respondents support government aid to G.M. Fifty-six percent of respondents, given a choice between providing government funding for GM or letting it go out of business, chose the latter.

USA Today notes that June 25 is one of the looming deadlines for states and cities to apply for economic stimulus money that has been made available for energy-saving programs. The article mentions a Green Boot Camp currently taking place at Harvard University, which is “bringing together parties that rarely interact — from state and city officials to housing authorities, economic and workforce development agencies and utility companies.” The Living Cities initiative aims to help local governments develop projects and partnerships and better strategize about stimulus money.

The Orlando Sentinel reports on the usage limitations of stimulus money, particularly with respect to salvaging teaching jobs: “If district leaders had their way, there would be more flexibility in how they spend the money,” it states. “A priority would be holding on to jobs. Some districts need new buildings and repairs, which stimulus dollars cannot be used to fund.”

NJBiz takes a look at lobbying firms that are developing special teams to “guide private firms and local governments to lucrative projects or funding opportunities” in such areas as transportation, clean-water technologies, and health technology ($19 billion earmarked for just the last). Says a partner at a Trenton-based public affairs firm, “I find out what pots of money are available, and make some decisions on where and what are our best chances.” But the article also notes that the greater amount of transparency in stimulus project funding means that companies and local governments need less hand-holding—a statement that seems a bit credulous, given the regular reports of confusion at the local level.

Take, for instance, a story in the Fort Worth Business Press, which reports on a local task force created “to work on both receiving and spending funds.” In January, Tarrant County organizations submitted “about $3 billion worth of projects” to the federal government for approval—but “as the stimulus program evolved, federal agencies were given funds for general purposes, and organizations were asked to apply again for funds directly from the agencies.” Following the confusion, the task force was created to help organizations in Tarrant County keep track of the stimulus application and approval process.

Meanwhile, the News-Tribune reports on stimulus-enabled hires in Washington state: in the Hanford area, they include “decontamination and demolition” workers, health physics technicians who will work on a nuclear reservation, and nuclear chemical operators. It’s a reminder that many of the jobs enabled by stimulus funding involve hazardous materials; but the article notes that most new hires seem impressed by the level of the paid training.

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Jane Kim is a writer in New York.