Detroit’s corporate jets and dollar paychecks don’t mean a damn thing in a global recession.

The labor situation has become so dire that you can now hire an American Blue Chip CEO for a dollar – and a ride to work.

I’ve already reported in these pages as to how many of the top officers of the few remaining grand old Wall Street houses are forgoing bonuses this year. Now we hear that GM’s Rick Wagoner and Ford’s Alan Mulally have cut themselves back to a mere dollar each for 2009.

They are not the only folks willing to do a lot more for a tad less. One of the peculiar byproducts of these uncertain times is a sudden 1.3% increase in U.S. worker productivity.

It’s a Recession (At Least) After All

Last month (officially the 11th in our newly christened recession) saw another 250,000 jobs eliminated, making it the worst November since 2001. With unemployment hovering somewhere between 6.5% and 10% (depending on who you ask), the remaining 90% of workers who have yet to lose their jobs appear to be working their rears off.

What’s more, nobody has the nerve to ask for overtime, a raise or even so much as an extra cup of coffee to do all this extra work. While total labor costs in the third quarter did indeed go up at an annualized rate of 2.8%, this gain missed forecasts by some 23%.

We already know that Wall Street is cutting itself to the bone. And anyone who did go shopping on Black Friday knows that most every retail joint out there is short-staffed.

The (All New) Worst Month Ever

There is a secret benefit to pulling clerks off all the registers: the ensuing hour-long lines make it look like you are doing lots of business, when in reality you are just ticking off your already-enfeebled customer base.

Not to worry, shoppers: those lines look to be getting shorter every day (and not because of the supposed shift to online retailing). The Institute for Supply Management reports that its index of non-manufacturing businesses (that’s the catchall term for about 90% of the U.S. economy) fell 37.3 in November. This is the index’s lowest level since the ISM began totting up these stats back in 1997.

Okay, maybe you should worry a bit after all.

Tone Deaf and Clueless

This news seems to have emboldened those aforementioned automotive executives.

Last week, a trio of them flew into Washington on their private jets to ask Congress for $25 or $50 billion dollars, give or take a nickel or two. Congress rewarded the trio’s spectacular display of tone-deafness with a symbolic trip to the woodshed: “Sell the planes and then we’ll talk numbers.”

Well they’re back (this time via coach), and here’s the gist of their new “more detailed” proposals: Ford’s Mulally says that all he needs is access to the rotating credit lines he can’t get from the banks anymore. If he can’t get that, he’ll muddle through somehow.

Maybe he’ll sell Volvo back to the Swedes or peddle off Ford’s share of Mazda. But he’ll manage.

Bankruptcy is NOT an Option (Unless We Really, Really Have To)

Wagoner was a bit more strident: he is warning Washington that if he doesn’t get a minimum of some $10 billion in the next few weeks, General Motors will go bankrupt. Practically speaking, this does not mean that they will stop making cars. Rather they would in all probability stiff pensioners and share and bondholders.

This is actually not the worst outcome Wagoner et al. could imagine. But they certainly can’t get caught wishing for this sort of relief. It just isn’t done, you know.

But Chrysler Vice Chairman Jim Press has trumped them all. He has gone all Dr. Evil on us, warning Washington that failure to pay off Detroit will plunge us all into a full-fledged depression.

Strong Words From Such a Small Player

While I don’t doubt the automakers could cause us a world of hurt, I must protest that depression is a strong term to be bandying about, considering that these companies no longer command anywhere near as much of the economy as they once did.

And, sadly, I will go even further and suggest that knuckling under to their extortionist demands would not be enough cure our newly back-dated recession.

My reasoning is simple and straightforward: this crisis is not just an American issue anymore. Maybe we invented the peculiar mortgage bonds that triggered all this foolishness. But we certainly don’t have a monopoly on stupidity.

It’s A Shrinking World After All

England, and indeed most all of Europe, was more than happy to match us stride for stride as we raced into the mortgage mire. In the end, both were even more exposed to failing real estate than we were.

Indeed, it is only the recent collapses of the pound and the euro that make the U.S. dollar appear to be gaining ground these days. What’s more, their economies are doing just as badly as ours.

The Chartered Institute of Purchasing and Supply reports that the Brit service sector is contracting at the fastest pace in at least 12 years. And the Royal Bank of Scotland (or what’s left of it anyhow) tells us that its European service sector index just put in its sixth straight month below the critical recessionary 50 mark.

Call It What You Will, Just Be Sure to Pay Attention When It Hits

Whatever this thing of ours turns out to be, be it “Mere Stagflationary Recession” or “Full-Fledged Deflationary Depression,” it is most certainly leading to a global paradigm shift.

Old fortunes will be lost – heck, many have been already – and new fortunes will be made. (Indeed, from what WaveStrength Options Weekly readers are writing in to tell me, more than a few already have.)

As for a few old school Blue Chip execs cutting themselves to a buck a year?

They’ll be making less than that shortly.

 
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