From the Center for Automotive Research, a news release summarizing a new report, “The Impact on the U.S. Economy of a Major Contraction of the Detroit Three Automakers.”

ANN ARBOR, Mich., Nov. 5, 2008 - Researchers at the Center for Automotive Research (CAR) in Ann Arbor, Michigan, estimate the impact on the U.S. economy would be substantial were all-or even half-of the three Detroit-based automotive manufacturers’ U.S. facilities to cease operations. The immediate shock to the economy would be felt well beyond the Detroit Three companies, negatively impacting the U.S. operations of international manufacturers and suppliers as well. Nearly 3 million jobs would be lost in the first year if there is a 100 percent reduction in Detroit Three U.S. operations.

“Our model estimates that a complete shutdown of Detroit Three U.S. production would have a major impact on the U.S. economy in terms of lost wages, reductions in social security receipts, personal income taxes paid, and an increase in transfer payments,” said Sean McAlinden, CAR chief economist and the study’s leader. “The government stands to lose on the level of $60 billion in the first year alone, and the three year total is well over $156 billion.”

Americans have chosen a new president, placing their faith in Illinois Senator Barack Obama to lead the country for the next four years. The mandate is clear – with at least 349 electoral votes – reaffirmed by strong voter turnout across the nation.

It was a decision of historic importance, as Senator Obama becomes the first African-American elected President. Yet this election was not about history, but about the future. The voters believe that Barack Obama was the candidate best equipped to lead the United States through the difficult times ahead.

Differences of opinion will still occur, but now is the time to change the tenor of the debate. The last decade has tied the country in knots with rancor from both sides. It is time to heal, and it is time to work together to move our great nation forward.

Remember this: Everyone who stood for election cares about our country, and their care, concern and allegiance will carry on into the future. And our democracy is strengthened.

Now it’s incumbent upon Democrats and Republicans, business and labor, the young and old and everyone in between, to work together to create policies to make our country stronger. The economic challenges are great: the financial crisis, the pressing need to create jobs, the never-ending global competition. Our security at home and abroad must never be threatened.

We stand ready to work with the new leadership. Manufacturers are eager to share experiences and hard-earned insights and information with America’s leaders.

America has spoken, our democracy has been refreshed, and the future awaits. To President-elect Obama, we send our sincere and best wishes for a successful Presidency. To Senators and Representatives, returning and newly arriving, congratulations. To all, we say call on us. Manufacturers want you to succeed in the responsibilities you have accepted and earned, and in doing so, to move our nation forward.

Quite interesting, in terms of all-politics-is-local observations. From Alan Greenblatt at Governing:

Few legislative chambers changed hands yesterday. Those that did reflected the increasingly regional nature of the major parties’ strength.

“This wasn’t a big, overwhelming night for Democrats,” says Tim Storey, of the National Conference of State Legislatures. “They definitely got their wins, but they didn’t command legislative elections like they did two years ago.”

Democrats won the biggest prize of the night, taking control of the New York Senate for the first time since 1966 — and gaining control of the entire New York State government for the first time since the Depression. They now hold at least 32 seats in the 62-seat chamber.

But Republicans pulled off the biggest surprise of the cycle, taking the Tennessee House for the first time since 1971. They also broke a tie in the Tennessee Senate, winning a solid majority that gives them total control of the legislature for the first time since Reconstruction.

Republicans also broke a tie in the Oklahoma Senate, taking control of that chamber for the first time ever.

Finally, congratulations to your correspondent’s former boss, Governor John Hoeven of North Dakota, the first governor in the state to win election to a third, four-year term. Seventy-four percent!  Hoeven has emphasized jobs-creation in North Dakota, where economic growth and the expansion of manufacturing has been driven by the energy sector — coal, some ethanol, and oil, lots of oil. 

With 44 states having now closed their polls and the next hour mark nearing, there’s more than enough evidence to make a few basic observations…

Democrats are enjoying an evening worthy of solid jubilation, as Senator Obama wins the key states of Pennsylvania and Ohio on his way toward an apparent victory. Democrats are picking up seats in the House and Senate, but it appears they will not attain the filibuster-breaking threshold of 60 votes.

According to the network projections, Democrats defeated incumbent Republicans in New Hampshire (Shaheen over Sununu), Virginia (Warner over Gilmore), North Carolina (Hagan over Dole) and most likely will win the open races in Colorado (Udall) and New Mexico (Udall). However, Republicans retained enough Senate seats to prevent the attainment of 60: Republican Leader Mitch McConnell in Kentucky, Saxby Chambliss of Georgia and, it appears at this point, Roger Wicker in Mississippi.

In the Senate, Republican incumbents remain up in the air: Minnesota with Sen. Coleman versus Al Franken; Oregon wtih Sen. Gordon Smith versus Jeff Merkley; in Alaska, Sen. Ted Stevens against Mark Begich.

Louisiana’s Senate race, the only serious challenge against an incumbent, is still close between Democratic Sen. Mary Landrieu and Republican Treasurer John Kennedy.

We take special note of Senator McConnell’s victory. The Senator has been a stalwart ally of manufacturing. He has been a key leader on energy supply legislation and against the destructive Employee Free Choice Act.
 

Indiana is the most manufacturing-intensive state in the country, and first-term incumbent Republican Governor Mitch Daniels has exerted a great amount of effort at expanding and diversifying the state’s economy. (For a good summary of his philosophy, see these materials from his February address at AEI.)

Earlier in his term, he took on some hot-button issues — statewide Daylight Saving Time, long-term leasing of the Indiana Toll Road — and irritated organized labor. With a strong campaign by Senator Obama in the state, Democrats had hopes in unseating Daniels, the former Bush OMB Director, with former Congresswoman Jill Long Thompson.

Apparently voters appreciate Daniels’ labors, as Associated Press has now called his re-election. Congratulations and keep up the good work on behalf of manufacturing, Governor.

Polls in Virginia, Georgia, South Carolina, Vermont, and parts of Indiana and Kentucky are now closed.

Mark Warner has been projected as the winner of the Virginia Senate race.  Democrats are plus one.  Mark Warner is a pro-business Democrat who has extended an open door policy to the NAM and will be good to work with.

Catching up …(earlier posts here):

In this key pre-emption case, Wyeth v. Levine, arguing for Wyeth was the former solicitor general, Seth P. Waxman of Wilmer Hale, and representing the Justice Department as amicus was Deputy Solicitor General Edwin S. Kneedler. (DOJ’s amicus brief is here.) Representing Diana Levine was David C. Frederick of David C. Frederick, Kellogg, Huber, Hansen, Todd, Evans & Figel. News coverage:

Adam Liptak of the New York Times did a nice job providing legal context and framing the issues:

Several justices appeared open to the idea that pre-emption could follow from the F.D.A.’s approval of a drug label - but only if drug companies remained subject to lawsuits if they failed to disclose new information about potential risks. There was much discussion of what information should be considered new.

 

Other justices seemed prepared to allow pre-emption - but only if the drug agency had considered the particular risk before approving the label.

 

Given the justices’ interest in those refinements, the court seemed unlikely to rule broadly on the larger issues in the case: whether the agency and other federal regulators set minimum safety standards that states are free to augment or whether they make judgments about the optimal balance between risks and benefits that states must follow.

Ted Frank of the American Enterprise Institute also summarized the issues well in August in the D.C. Examiner, “As even Clinton appointee Justice Stephen Breyer pointed out in a February 8-1 Supreme Court decision about medical devices, if we are to have meaningful safety regulation, those standards should be determined by federal regulators, not by untrained juries who hear only the sad stories of side effects in hindsight without considering the larger policy issues.”

A pre-election round-up on the dishonestly named Employee Free Choice Act, which would eliminate secret-ballot elections in the workplace when unions try to force employees into a bargaining unit:

• Bloomberg, Kevin Hassett of AEI, “`Panic of 2008′ Is Better Than the Alternative“: “Supporters of card-check are presumably willing to accept the possibility of coercion because they believe the end — a large increase in unionization — justifies the means. But if that end is achieved, then it likely will lead to a surge in labor costs and reduction in competitiveness for U.S. companies at just the wrong time.”
• Atlanta Journal-Constitution, Jim Wooten column, “It’s truly vital that we keep Chambliss,” citing the Employee Free Choice Act to endorse the re-election of Sen. Saxby Chambliss. Wooten, associate editorial page editor, is the AJC’s token conservative.
• Wall Street Journal, “Economy Heightens Debate Over Bill to Ease Union Organizing “
• People’s Weekly World (you know, the Communists), “Labor, Virginia and Obama,” quoting Chris Lane, 33, president of CWA Local 2201, “It is the most important pro-labor legislation ever. I truly believe in my heart of hearts that every worker would join a union if he or she was not being harassed and intimidated.”

Speaking of being harassed and intimidated, from The Associated Press, North Dakota, “Event bars Fargo teacher“:

BISMARCK – North Dakota’s new Teacher of the Year was barred from a reception held to honor top teachers because she declined to join the North Dakota Education Association, education officials said. One denounced the move as “hurtful and vindictive.”

Beth Ekre, a sixth-grade teacher at Carl Ben Eielson Middle School in Fargo, showed up for the Oct. 23 “Celebration of Excellence” social at a Fargo hotel, hours after her selection as North Dakota’s Teacher of the Year was announced at an NDEA instructional conference.

The event was intended to honor award-winning teachers, including the new teacher of the year and the North Dakota winner of the Milken Educator Award, officials said.

Ekre said Dakota Draper, the NDEA’s president, and Linda Harsche, a public relations staffer, met her at the door and told her she could not attend because it was limited to association members.

“It was a humiliating experience,” Ekre said. “It’s one of the most uncomfortable situations I’ve ever been in.”

Humiliating? Uncomfortable? Whose fault is that? All of this could have been avoided if the NDEA were able to pressure Ekre into joining the teachers’ union.

Well, soon enough. First, pass the Employee Free Choice Act and then, eventually, state Right to Work laws will go.

Election Day is Tuesday, November 4th, 2008, Anno Domini.

The House is dark this week, reconvening newly constituted on January 3, 2009. The Senate convenes at 10 a.m. this morning and again Thursday for the pro forma sessions designed to prevent recess appointments by President Bush. Will this custom live on in 2009?

No committee hearings.

Judicial Branch: At 10 a.m. this morning, the U.S. Supreme Court hears oral arguments in Wyeth v. Levine, one of the major business-related cases this term. At issue is “preemption,” in this case, whether pharmaceuticals should be subject to a single national regulatory regime in the FDA. See NAM’s Legal Beagle summary of the case and related Shopfloor.org posts.

Executive Branch: On Thursday, the Deputy U.S. Trade Rep Ambassador Veroneau delivers remarks at the Council of the Americas program, “Energizing a Renewed TransPacific Partnership.” Also Thursday, Commerce Secretary Gutierrez speaks at the Woodrow Wilson Center for Scholars on economy, freedom and democracy. On Friday, Gutierrez travels to the University of Miami for remarks on the economy and the environment.

Economic Reports: The Institute for Supply Management’s manufacturing index for October is slated for release at 10 a.m. today. Two Bureau of Labor Statistics‘ reports this week: On Thursday, 3rd Quarter Productivity and Costs; on Friday, October employment figures. Election Day, November 4th, may have some effect on the economy as well.

Europe: From the EUObserver: “EU leaders will hold an extraordinary meeting on Friday. Summoned by the French president, Nicolas Sarkozy, who chairs the bloc’s rotating presidency, the heads of state and government are to formulate a common position ahead of the G20 summit scheduled a week later in Washington to address the financial crisis and its effects on the world economy.”

Speaking of the election, check back at NAM.org and the blog, Shopfloor.org for reaction and analysis to the election results.

From a letter sent by a diverse coalition of think tanks, activists and lobbying groups urging the Bush Administration to forego “midnight regulations,” an excerpt:

As a coalition, we do not take a position on any particular rule but, rather, a principled stand on the proper conduct of rulemaking. Our coalition likely contains proponents and opponents of nearly every major regulation you would consider. We have different interests but share a conviction: for the next few months, you should avoid issuing all but the most urgent new regulations.

Agreed, as a matter of principle. Last-minute regs meant to “advance controversial policies while subverting transparency, rigor, and legitimacy in the rulemaking process” are objectionable. But the Administration asserts — with solid justification, seems to us — that it’s doing nothing of the sort and in fact has taken effort to ensure public input and transparency.

If work on a regulation has been under way for nearly two years — see the Family and Medical Leave Act discussion – should everything just come to an end now, arbitrarily? Is Halloween the drop-dead date? Or maybe next Wednesday, the day after the election, because the incoming Administration should enjoy a de facto veto? Or perhaps the first Sunday of Advent because, well, it’s Christmas time and people are busy?

We detect a slippery slope. If the Administration calls it quits now, the November deadline will become a July deadline soon enough. Eventually some activists will demand that future Administrations take no action at all in their final year in office — that is, they will demand it of executive branch officials who might favor deregulation or at least be skeptical of an expanded regulatory state. The more liberal, pro-regulation, economically intrusive Administrations will get a pass from some of those now raising objections.

So far, the Administration has made a much compelling argument about its careful, coherent and transparent approach toward the regulatory process than have groups like OMB Watch, who really just dislike the substance of the regulations under consideration. Behind their attack against process is the usual old desire for more government control of the private sector.

The signers of the letter, which include some solid pro-market advocates, follow. We hope they’re not being played.

Eli Lehrer, Senior Fellow, The Competitive Enterprise Institute
Steve Pociask Chief Economist, American Consumer Institute
Robert Dewey, Vice President, Government Relations and External Affairs, Defenders of Wildlife
Terrence Scanlon, Chairman & President, Capital Research Center
Adam Kolton Sr. Director, Congressional & Federal Affairs, National Wildlife Federation
Wayne Brough, Ph.D., Vice President for Research & Chief Economist, FreedomWorks
David Jenkins, Government Affairs Director, Republicans for Environmental Protection
Marcia Aronoff, Senior Vice President for Programs, Environmental Defense Fund