Good coverage of today’s news of the 3.5 percent rise in third quarter GDP in The New York Times, “U.S. Economy Began to Grow Again in the Third Quarter.” NAM board member Sandra Westlund-Deenihan comments:

A slower drawdown in inventories was one bright spot in Thursday’s report, as it indicated that businesses have largely sold out their current stock and may rev up orders in the coming months to replenish supplies.

“Everybody had been dealing with a just-in-time status quo,” said Sandra Westlund-Deenihan, president and design engineer for Quality Float Works, a plant in Schaumburg, Ill., that manufactures metal float balls and valve assemblies. “They were living off inventories they’d built up over the last several years. Now they’ve drawn that down and reached a point where they may have to have it ready and back on the shelf again.”

Like many American manufacturers, Ms. Westlund-Deenihan says that international business has helped keep her company afloat. United States exports over all grew at an annual rate of 14.7 percent in the third quarter, while imports grew 16.4 percent.

See also commentary by Dave Huether, NAM chief economist.

With Speaker Pelosi releasing the House Democratic version of legislation to expand the government’s control of health care — just 1990 pages — we note the letter from major employers group, including the National Association of Manufacturers, sent to the Hill on Monday. Excerpt:

[We] are writing at this critical time to once again convey that employers of all sizes and all industries believe that fundamental health reform is essential. Maintaining the status quo is both unacceptable and unsustainable. Employers clearly understand that unless we bring the nation’s health care costs under control, the current health system threatens jobs, our ability to compete at home and globally, and ultimately the core of our economy.

But not any health reform will do. We also must get the fundamentals of health reform right. Legislation that does not bend the cost curve for both public and private health plans is not accomplishing its goal and contradicts the strong bipartisan consensus that has driven the case for health care reform. Legislation limiting the flexibility and innovation in the private sector would erode parts of the system that are now working. And, legislation that creates a public health plan would inevitably shift costs onto the private sector, and would therefore fail to achieve the bipartisan goal of controlling overall health care costs.

Other signers of the letter: American Benefits Council, Corporate Health Care Coalition, The ERISA Industry Committee, U.S. Chamber of Commerce,  National Association of Wholesaler-Distributors, National Coalition on Benefits, National Retail Federation, Retail Industry Leaders Association.

(Hat tip: Politico, with its story.)

The Department of Labor’s Bureau of Labor Statistics today released workplace safety statistics for 2008. (BLS release) The data highlight an important, positive development often overlooked by many policymakers – workplace injury and illness continue to significantly improve in both the private sector and more specifically in manufacturing. Overall in the private sector, we saw the most significant improvement with a 7.1 percent decrease in total recordable case rates; rates in manufacturing workplaces improved by 10.7 percent.

While no one factor completely explains this improvement, Members of Congress and Labor Department officials need to understand what’s working before they attempt to overhaul the current system. The leadership at the Labor Department has pledged a new emphasis on more aggressive enforcement and has questioned the effectiveness of non-punitive programs that assist employers to comply with existing standards.

In order to continue improving safety, policymakers should keep doing what works and that’s the cooperative approach that the OSHA has undertaken with employers. Proposals like the Protecting America’s Workers Act will create a more adversarial relationship while doing nothing to reinforce the successful work that’s already taken place.

UPDATE 3:23pm Labor Secretary Hilda Solis acknowledges the improvements, while continuing to stress the need for “strong enforcement.” Safety should be a top priority in every workplace and good injury data is essential, agreed, but we suspect any effort to validate recordkeeping will find the same improving trends among manufacturers.

The most compelling, forceful testimony we saw from yesterday’s Senate Environment and Public Works’ hearing on the Boxer-Kerry cap-and-trade bill came from Bill Klesse, CEO, President and Chairman of the Valero Energy Corporation. Klesse was testifying on behalf of the National Petrochemical and Refiners Association. Excerpt (with links added):

The Energy Policy Research Foundation reported this month that even before domestic refiners face rising costs from carbon emissions, they will face a higher cost structure and rising international competition that threatens 2 million of the current 17.5 million barrels a day of domestic operable capacity with permanent closure….

The objective of this Congress and the Administration should be to seek new means for reducing emissions without causing harm to the domestic economy. The approaches being discussed in Washington are entirely counterproductive to lifting our economy out of the recession, reducing the staggering national unemployment rate, and even reducing global greenhouse gas emissions. S. 1733, like its House companion, H.R. 2454, would only exacerbate our current challenges by forcing U.S refiners to further reduce or even close operations in the face of rising costs and unrealistic emissions reduction targets.

Bottom line?

At stake are millions of American jobs, our national energy security, and the health of our
economy. In the midst of a severe recession and fears of a jobless recovery, we must stay focused on these three concerns, particularly in the face of a competitive global marketplace that quickly could compromise our nation’s stronghold in the energy industry.

The Department of Commerce today released the third quarter Gross Domestic Product figures, reporting that the GPD rose 3.5 percent in the quarter. (News release, Sec. Locke statement.) While this upturn is encouraging, it was due mainly to temporary factors and is just another signal of the beginning of a long, slow crawl by manufacturers to get back on their feet.

Motor vehicle output increased at an annual rate of 158 percent and accounted for nearly half of the upturn in GDP. This was due to the Cash for Clunkers program which provided a temporary spark to the economy. Therefore, we can expect a payback in future quarters due to this third-quarter surge in auto purchases. At the same time, the tax credit for first time homebuyers provided a boost to the 23 percent increase in residential investment last quarter.

The 14.7 percent rise in exports in the third quarter report was the most encouraging sign for manufacturers. While this increase was likely elevated by increased demand in trade for motor vehicles, the improved economic conditions abroad combined with the declining dollar indicates that exports will be a durable component of an economic recovery in coming months.

The improved export climate signals that when the economy gets fully back on track in the latter half of next year, the recovery is likely to be stronger than the recovery following the 2001 recession, when exports were anemic due to an overvalued dollar and weak growth abroad.

While this is a positive development, it is also important to note that we are still in the very early stages of recovery.

The Washington Post’s editorial policy, or at least its editors, must think it’s OK for the paper’s employees to compare people who question whether anthropogenic global warming is occurring to those who deny that an historic evil, the Holocaust, took place. How else to explain columnist Dana Milbank’s slurs yesterday followed by Tom Toles’ cartoon today featuring a “climate change denier?”

The term is an ugly attempt to silence people who disagree with the so-called scientific consensus. Newspapers should be supporters of robust public debate, and the yet the Post countenances the calumny. Very sad.

P.S. As a commenter on the Toles cartoon notes, how interesting that the insult used to be “global warming denier” and now it’s “climate change denier.” Well, of course the climate is always changing. No one denies that.

Diane Rehm is celebrating 30 years as host and executive producer of the Diane Rehm Show on local NPR station, WAMU.

And even though it’s a little odd to offer praise on a day a substitute is hosting her program, Ms. Rehm really does book excellent guests. Today, with Frank Sesno filling in, the program offers Secretary of Labor Hilda Solis and Margaret Atwood. Impressive.

Secretary Solis is on in the first hour, 10 a.m. If we had one question to pose to her it would be: Supporters of the Employee Free Choice Act say the legislation is necessary because the process of recognizing a union is broken and stacked against the workers. Yet unions have recently won two-thirds of workplace elections. (See this March 10 Shopfloor.post.) Doesn’t this fact undermine a core argument in favor of EFCA?

If we had a second question it would be: President Obama’s nominee to head the Occupational Safety and Health Administration, David Michaels, is very controversial for many reasons. including his views on the admissability of junk science into trials and his organization’s (SKAPP) close alignment with the interest of the trial lawyers. As an Assistant Secretary of Labor, he would work for you, and so here’s the question: Shouldn’t Michaels at least go before the Senate HELP Committee for a confirmation hearing to address these issues?

We offer them in sincere hopes of substantive policy discussions.

Sam Stein of The Huffington Post reports that the AFL-CIO bought full-page ads in the The Hill, Roll Call, and Politico featuring Major League Baseball players touting the Employee Free Choice Act. From “World Series Stars Push Employee Free Choice Act“:

[As] part of the ad, some of the best-known names in the game, including three players who are participating in the fall classic — Jimmy Rollins, Mark Teixeira and Shane Victorino — pitch the societal benefits of stronger labor organization.

“[A]ll Americans should have the same opportunity we’ve had — to be able to join a union without being fired and to negotiate with their employers without being penalized,” their statement reads. “Today, our country is facing some tough times. Health care costs are skyrocketing. Families are losing homes. Savings and retirement income are disappearing overnight. Now more than ever, we need a strong union movement to protect our jobs, our pensions, and our future. The Employee Free Choice Act simply guarantees a level playing field for all workers. It makes sure everyone plays by the same rules. That’s as important in the workplace as it is in baseball.”

The headline of the ad, and apparently its sole argument, is “A Level Playing Field is as important in the Workplace as it is in Baseball.”

Uh, pitcher’s mound?

Besides the strained simile, one doubts the average worker is going to be persuaded by Mark Teixeria to give up the secret ballot or submit to contract terms imposed through binding arbitration.

And, as the Workforce Fairness Institute points out, this ad recalls the AFL-CIO’s elitist pitch of having “West Wing” actors Martin Sheen, Bradley Whitford and Richard Schiff heading to Capitol Hill to lobby for EFCA.

These ad campaigns remind us of some of the PETA stunts, you know, outrageous analogies or costume gimmicks that don’t inform, don’t move the debate, and prompt most members of the public to say, “What the…?” But the ads do spend money and may therefore convince somebody, somewhere the sponsors are actually doing something.

The Senate Environment and Public Works Committee today held its second of three hearings on S. 1733, the Clean Energy Jobs and American Power Act, i.e., the Kerry-Boxer bill to restructure the U.S. economy through regulation, subsidy, taxation and more expensive energy.

Twenty-seven witnesses were scheduled to testify on four separate panels, which seems like too many really to pay close attention to.

Let us then highlight the testimony of Brett A. Vassey, President & CEO of the Virginia Manufacturers Association, an active member of the National Association of Manufacturers. We appreciated Vassey’s emphasis on Virginia in a global economic climate:

Federal Government Credit Allocation. This system allows elected political leaders to choose “winners and losers” in the economy. Waxman-Markey directs that every commercial user of energy would be given a certain number of carbon credits, permitting it to emit a specific amount of carbon each year. If a manufacturer exceeds its credits, it has to purchase extra credits from others who do not reach their cap. This system has too much risk for global manufacturers who are making decisions about their future capital investments today. Congress allocating credits is a critical decision because Virginia and other states will lose opportunities to compete and create jobs in the future as long as the threat of this allocation system exists in the public debate.

And …

Leakage. Proponents of “cap & trade” believe immediate regulation will force industry to stop using traditional sources of energy. Unfortunately, this position demonstrates a fundamental misunderstanding of global manufacturing today. The truth is “cap & trade” is just another tax on businesses and consumers – regressively so on manufacturing – and it does nothing to stop “leakage” to nations with more favorable conditions. For example, even if Virginia limited all of its CO2 emissions, China’s CO2 emissions growth alone would replace all of Virginia’s CO2 emissions in only 77 days. Virginia is .44% of the global GHG emissions.

See also Vassey’s Townhall column, “‘Cap’ Industrial Competitiveness and ‘Trade’ Domestic Manufacturing Jobs Abroad.”

Latest tax developments …

From Reuters, “Tax loss carryback proposal gaining U.S. support“:

WASHINGTON (Reuters) – A proposal to expand U.S. companies’ ability to apply losses in 2008 or 2009 over the prior five years to get immediate cash is gaining traction in the U.S. Congress.

All companies, no matter what size, would be able to apply losses in one of those years to full year taxable income for the prior four years and to 50 percent of income in the fifth year, according to a summary of a plan backed by Senate Majority Leader Harry Reid and Senate Finance Chairman Max Baucus, both Democrats.

The NAM’s web materials supporting Net Operating Loss legislation are available here.

Bloomberg, “Nelson Says Senate to Extend, Reduce Homebuyer Credit“:

Oct. 26 (Bloomberg) — Senate leaders are negotiating to extend and gradually reduce an $8,000 tax credit for first-time homebuyers through 2010, Senator Bill Nelson of Florida said.

UPDATE (12:20 p.m.): The Washington Examiner today has a First-Time Homebuyers’ Guide insert with this story, “‘Good chance’ Congress will vote to extend tax credit,” interviewing Rep. Frank Kratovil (D-MD), a Realtor. Extend the credit, but not expand it, is the conclusion.

And can you believe that the great, obscurely visionary Mancunian band, The Fall, has paid tribute to the carryback tax provisions? Well, listen to this clip and say it isn’t so.