Picture an ailing enterprise, set back by shrinking market share, saddled with high labor costs and slammed by a severe recession, going before Congress on bended knee to beg for loan guarantees to keep operating through year’s end. The Detroit auto industry in 2008? Nope. The Penn Central Railroad in 1974.

No question, the Big Three are in dire straits. However, their predicament pales in comparison to that of Penn Central, an ill-fated combination of two Northeastern railroad titans that went into the books as one of the worst business failures in U.S. history.

The Pennsylvania Railroad and the New York Central System, whose sprawling but largely parallel empires connected New York to Chicago and Boston to St. Louis, merged in 1968 to form Penn Central, a colossal system with 19,000 miles of track, 100,000 employees and two bitterly antagonistic management teams. It filed for bankruptcy less than two and a half years later.

Already wounded, Penn Central suffered acutely during the deep economic downturn of 1973-75, making a normal reorganization almost hopeless.

During this time, Penn Central was said to lose $1 million a day. Deferred maintenance on tracks, classification yards, freight cars and locomotives cost the railroad dearly in delayed shipments and lost revenue. Derailments became a daily event—sometimes sitting freight cars literally fell off the tracks.

The federal government stepped in and created Conrail, which assumed operation of Penn Central and five other bankrupt Northeastern rail carriers beginning in 1976.

Having a stake in railroading through Conrail proved to be an eye-opener for the federal government and led to the 1980 Staggers Act, which deregulated the railroad industry. Conrail limped along for its first few years much as Penn Central had. Some of the property it inherited was in such pathetic condition that the only solution was to walk away. 

After a painful restructuring, Conrail turned a profit. Organized labor made major concessions that cost tens of thousands of jobs, hundreds of locomotives and thousands of freight cars were sent to the scrap heap, and thousands of miles of track were abandoned.

The story has a happy ending: Conrail went public in 1987 and enjoyed more than a decade as a profitable company before it was purchased and divided by two Eastern rail giants, Norfolk Southern and CSX.

Detroit’s happy ending has yet to be written—and it’s going to get worse before it gets better.

Don't expect much news from the Barack Obama team when it releases its report on possible contacts with Illinois Gov. Rod Blagojevich, Vice President-elect Joe Biden said Tuesday.

Federal prosecutors allege the governor was trying to benefit financially, or secure a White House appointment, in return for naming Obama's U. S. Senate successor.

Obama began an internal review of his staff's contacts with the governor after charges were filed earlier in December, and is expected to disclose his findings later Tuesday.

"I don’t think there’s anything to exonerate," Biden, in Washington for economic meetings, said. "It’s been clear that the president-elect has had no contact with Blagojevich, and you’ve seen that he’s asserted and you’ll find in the report that’s being released today that there’s been no inappropriate contact by any member of the Obama staff or the transition team with Blagojevich."

Rahm Emanuel, incoming White House chief of staff, reportedly contacted the governor about the appointment. Emanuel held Blagojevich's House seat after Blagojevich left to become governor six years ago.

U.S. Attorney Patrick Fitzgerald has said Obama was not involved in the case, and Associated Press reports that Emanuel is not a target of the investigation.

President-elect Barack Obama is on vacation in Hawaii, but he filled some more White House positions Tuesday. Among them: Shawn Maher, staff director and general counsel at the Senate Banking Committee _ and an important player in helping craft financial rescue legislation _ will become deputy director of legislative affairs for the U.S. Senate.

The Obama team, as announced in a news release:

Cassandra Butts, Deputy White House Counsel with a Focus on Domestic Policy and Ethics Cassandra Butts has been a long-time friend of and adviser to President-elect Obama since they were classmates at Harvard Law School. Cassandra is currently the general counsel to the Obama-Biden Transition Project. She recently served as the Senior Vice President for Domestic Policy at the Center for American Progress. Prior to joining CAP, she was a senior adviser to Rep. Richard A. Gephardt (D-MO) and served as the policy director on his 2004 presidential campaign.

Cassandra also served as director of Senator Obama's Senate transition in 2004-2005. Previously, she was an Assistant Counsel for the NAACP Legal Defense & Educational Fund, where she worked on civil rights policy and litigated voting rights and school desegregation cases. She also served as Legislative Counsel to Senator Harris L. Wofford (D-PA). Cassandra also served as an international election observer to the Zimbabwe parliamentary elections in 2000. She is a graduate of Harvard Law School and the University of North Carolina at Chapel Hill.

Elizabeth Sears Smith, Deputy Cabinet Secretary

Liz Sears Smith is the Chief of Staff for Congressman and Obama Chief of Staff Designate Rahm Emanuel.  She has served in this role since Rep. Emanuel was elected to Congress in 2002. Prior to this, Smith served in the Clinton Administration as a Deputy Assistant Secretary in the International Trade Administration at the Department of Commerce, where she managed 450 staff around the country and a budget of $35 million.

She was the Finance Director for Chicago ’96, the host committee for the 1996 Democratic National Convention and prior to that ran a public affairs consulting firm based in Chicago, Illinois. Smith graduated from the University of California, Berkeley and received an MBA from the JL Kellogg Graduate School of Management. 

Shawn Maher, Deputy Director of Legislative Affairs for the United States Senate

Shawn Maher most recently served as Staff Director and General Counsel to the Senate Committee on Banking, Housing and Urban Affairs. Prior to that position, he served as Legislative Director to Senator Christopher J. Dodd (D - CT) and as Counsel to Dodd in his capacity as General Chairman of the Democratic National Committee. In the House of Representatives, Maher served as Staff Director and Chief Counsel to the Subcommittee on Consumer Credit and Insurance and as Legislative Director to former Rep. Joseph P. Kennedy II (D. - MA). Prior to his service on Capitol Hill, he worked as a Law Clerk to the Hon. Mary Johnson Lowe, US District Judge for the Southern District of New York. He is a graduate of Harvard College and New York University School of Law.

Dan Turton, Deputy Director of Legislative Affairs for the United States House

Dan Turton began his career with Majority Leader Richard A. Gephardt of Missouri almost twenty years ago serving in a variety of positions including six years as Senior Floor Assistant.  Turton served as a liaison between the House Democratic and Republican leadership and was Mr. Gephardt's representative on the House floor - making floor procedure and scheduling decisions, coordinating House Democratic legislative strategy and advising members on day-to-day activity on the House Floor. Turton also served as the Democratic parliamentarian on the House floor.  In 2006, Turton returned to the House of Representatives as the Majority Staff Director for the House Committee on Rules under Chairwoman Louise M. Slaughter of New York where he served as the Committee's representative to the House Leadership and was responsible for coordinating priorities between all House Committees, Leadership and Members of the Rules Committee.

Camille Johnston, Special Assistant to the President and Director of Communications for the First Lady

Camille Johnston is the former Director of Communications for Mrs. Tipper Gore.  Most recently, Johnston worked as a communications consultant for the Entertainment Industry Foundation on the Stand Up To Cancer campaign, the nationally televised fundraising special that aired simultaneously on ABC, CBS and NBC and raised more than $100 million for cancer research. Prior to this, Johnston was the Senior Vice President of Communications for the Los Angeles Dodgers overseeing corporate communications, media relations, internal communications, publications, and broadcasting . 

After leaving the White House, Johnston joined Rodale Inc. the largest independent publisher in the U.S. as Vice President of Corporate Communications.  A veteran of the 1992 and 1996 Clinton-Gore campaigns, Johnston also served as Press Secretary for Labor Secretary Robert Reich and Education Secretary Richard Riley.  From 1997 – 1999, Johnston was the Director of Communications for WBBM-TV in Chicago, Illinois. Johnston holds a B.A. in political science from UCLA. 

Katie McCormick Lelyveld, Press Secretary for the First Lady

Katie McCormick Lelyveld joined the Obama campaign in March 2007 as Michelle Obama's  Director of Communications.  In this role, Ms. McCormick Lelyveld was primarily responsible for developing, managing and implementing Mrs. Obama’s media strategy and public outreach.  Over her twenty months on the campaign, Ms. McCormick Lelyveld introduced Mrs. Obama to a national audience, showcasing her roles as a committed mother, established professional, concerned citizen and modern woman.  Ms. McCormick Lelyveld joined the campaign from The Glover Park Group, a communications strategy and government affairs firm, in Washington DC.  She served as Deputy Communications Director for John Kerry's presidential campaign in 2004 and worked for two years in the Office of First Lady Hillary Rodham Clinton.  Her experience also includes positions in public affairs and corporate communications with Edelman Public Relations and The Harbour Group, both in Washington DC.  Katie was born and raised in Chicago and is a graduate of Georgetown University.

Semonti Mustaphi, Deputy Press Secretary for the First Lady

Semonti Mustaphi currently serves as Mrs. Obama's Deputy Communications Director on the Obama-Biden Transition Team, a position she also held on the Obama-Biden Presidential Campaign. Prior to her work on the campaign, she held communications positions on Capitol Hill for Senators Harkin (D-IA), Schumer (D-NY) and Klobuchar (D-MN) - including Klobuchar's Senatorial campaign. She also worked on the Gephardt for President campaign. A native of Minnesota, her political experience began with the late Senator Wellstone where she worked in his Washington, D.C. office and on his last campaign. Semonti graduated with a Bachelor's Degree in Political Science and Communication Studies at Gustavus Adolphus College in St. Peter, Minnesota.

   After months of screaming headlines on the blogosphere, Republican internet consultant Mike Connell submitted to a federal judge's order and took the oath on election eve for a deposition about the 2004 presidential election. Word was that, once under oath, Connell wouldn't lie. He'd tell how Karl Rove and the GOP stole the 2004 election for George W. Bush, electronically flipping votes from Democrat John Kerry to Bush in a dozen western Ohio counties to cinch it.

    But despite allegedly admitting previously to a cyber security expert that he was involved, Connell swore that he knew nothing about any vote-rigging, according to Clifford Arnebeck, the liberal activist lawyer who interrogated him. 

   Now, as seems to happen in too many alleged conspiracies, Connell is dead. His single-prop airplane crashed next to a vacant house three miles short of the runway at the Akron-Canton airport Friday evening, And Blake Chenault, a reporter for CBS' Cleveland affiliate, quoted an anonymous close friend as saying that Connell was warned not to fly in recent months because his plane had been sabotaged. Chenault said Sunday night that Connell twice cancelled flights in the last two months because of ``suspicious problems'' with his plane.

    Connell's firm, GovTech Solutions, was among consultants hired to assist Ohio's GOP secretary of state, Ken Blackwell, in the posting of election returns on the internet in 2004. Also hired: the Chattanooga firm SMARTech, a leading Republican internet host and the host for the famed gwb43.com web site on which Rove and others sent politically related emails that disappeared during the 2007 scandal over the politicization of the Justice Department. Both SMARTech and a separate Connell company consulted for Bush's reelection campaign earlier in the year.

   Arnebeck, who sought Connell's testimony, had questioned him about alleged threats during the November deposition, but U.S. District Judge Solomon Oliver ordered those answers sealed. Arnebeck says an anonymous tipster alleged that Connell was warned that if he refused to take the fall for any election shenanigans, his wife would be criminally prosecuted for illegal activities with spouses of U.S. senators.

   And now, as aviation investigators try to unravel the cause of his plane crash, the liberal blogosphere is alive again with rumors of conspiracy.

 . 

    President Bush may take awhile to say goodbye. The White House said Monday he's thinking of making a farewell address.

    " I think he said that it's something he's thinking about and thinking about some ideas, but he hasn't made that decision yet," said White House spokesman Tony Fratto. " I think if he feels that he has something important to say and it's the right way to say it, he will.  But he just hasn't decided yet."

    Bush touched on the subject last week during an interview with C-SPAN's  Steve Scully, saying he was giving the idea  "serious thought."

    But, the president added, "I don't want it to be...kind of a real emotional goodbye. If I give it, it's going to be trying to leave behind some lessons learned.'

    Two such addresses are notable. In 1961, President  Eisenhower warned about the industral military coplex, and in 1797 George Washington warned against permanent foreign alliances and the evils of the political party system.

    If he does such an address, Bush said, he would probably advise "we have to be vigilant and can't let our guard down just because a terrorist threat exists."

    Another option, Bush said, is to "talk about isolationism and protectionism, and that it's very important for us to resist those 'isms.' The world needs our presence."

All those predictions that 4 million people would jam the streets of Washington for Barack Obama's Jan. 20 inauguration? That crowds would be so thick no one could ever leave town because no one could move?

Never mind.

A report in Monday's Washington Post says officials now figure "only" half that many, a mere 2 million, will jam the nation's capital that day. That's still a lot, four to five times as many as were here for President Bush's 2005 inaugural and well above the record of 1.2 million for President Johnson's 1965 swearing in.

Then again, if the weather's anything like it is today (morning temperatures in the teens, wind chills south of that) maybe the estimate will be cut in half again....

<a href="http://www.washingtonpost.com/wp-dyn/content/article/2008/12/21/AR2008122102224.html?hpid=topnews">Washington Post on the inaugural crowd</a>

Planners anticipate anywhere from 2 million to 4 million visitors during the week of the inauguration – far more than any in the past. Not only will they need a place to stay, but they’ll also need a way to get around.

Whether the 103-mile system will be able to handle such large crowds efficiently is one issue. Another is that Metro wasn’t designed or built with visitors in mind.

In his book, “The Great Society Subway,” Zachary M. Schrag, an assistant professor of history at George Mason University in Fairfax, Va., wrote that the planning process for Metro in the 1960s gave the needs of the city’s residents – many of whom worked for the federal government – first consideration.

Metro lines and stations, built largely in the 1970s and ’80s, were designed to serve Washington’s neighborhoods and their residents, and federal offices and their workers – not the city’s monuments and their visitors.

First-time visitors to the capital might not know, for example, that the closest Metro stop to the White House is McPherson Square, and that they’ll have to walk a few blocks. The Capitol is similar: It’s a few blocks to walk from the Capitol South station, and a few blocks more from the Union Station stop. What station is closest to the Washington Monument? Smithsonian, of course. (Who wouldn’t have guessed?)

The most obvious mismatch is the Woodley Park Zoo-Adams Morgan stop on the Red Line in Northwest Washington. As any stroller or wheelchair-pushing zoo visitor has discovered on a broiling summer or blustery winter day, upon exiting the station to street level, it’s a half-mile uphill hike on Connecticut Avenue to the zoo’s entrance.

For people traveling through Dulles International Airport: Sorry, but the 23-mile extension of Metro’s Orange Line is years behind schedule and billions over budget. The first stations won’t even open until 2013, too late for this inauguration – and the next.

Still, Metro may be the best way for people to get around on Jan. 20 and in the days before and after. The massive number of visitors, plus numerous street closures, will make buses and taxis scarce and slow, and driving in the District of Columbia a nightmare.

Metro will operate on its more frequent rush-hour schedule – and charge higher fares – from 4 a.m. to 9 p.m. on Jan. 20, and stay open until 2 a.m., two hours past its normal weekday closing time. Parking at stations, normally free on federal holidays, will cost $4. Visitors shouldn’t plan on using the Smithsonian station: It will be closed on inauguration day.

U.S. Senator Bob Corker became an important player last week in congressional negotiations over emergency aid to Detroit's ailing automakers. The Tennessee Republican came close to inking a deal, but talks broke down over when American carmakers would have to achieve labor compensation parity with foreign-based companies operating in the U.S.

So when President Bush announced Friday he would provide up to $17.4 billion in loans to General Motors Corp. and Chrysler LLC, Corker was warym particuarly since Bush set targets for restructuring he wanted reached.

 “The best solution would have been definite terms, within in a finite time period, committed to law, that protected taxpayers,” said Corker. “Instead, we have ended up with an agreement open to interpretation, that eliminates the sense of crisis, where taxpayer dollars are expended and we are left to hope that the next administration has the will to enforce the tough concessions necessary to make these companies viable for the long term.  Unfortunately, it is clear that stakeholders are already working to undo those tough concessions.”

But Corker held out hope that significant restructuring would occur.

“No one enjoys a crisis but sometimes it is the best opportunity to bring real reform. It is my sincere belief that requiring fundamental changes as part of a loan package is in the long-term interests of Michigan, Tennessee and our country," he said.

Here're some of his observations:

— The $850 billion in economic stimulus planned by the Obama administration over two years isn't nearly big enough, though he understands why everyone avoids "the T-word."

— Unemployment is likely to reach 9 percent by the end of 2009.

—It takes $200 billion in federal spending to bring the jobless rate down 1 percent.

—The economy is currently shrinking at a 6 percent annual rate.

His advice on how a patriotic American with money should spend it? On those items with the least foreign content — "Haircuts and personal services, not tainted toys and poisoned seafood."

And what's he going to do with the $1.4 million in prize money from the Nobel committee? Undecided, but it's down to $1.2 million because of the stronger dollar, he said. That's still a lot of haircuts.

Mark Felt, the former No. 2 FBI official who became journalism's most famous anonymous source, died on Thursday in Santa Rosa, Calif. He was 95. In May 2005, 33 years after the break-in at Democratic Party headquarters at the Watergate Hotel in Washington that ultimately led to the downfall of President Richard M. Nixon, Felt revealed that he was the source long known as "Deep Throat." Felt provided information about the break-in and subsequent cover-up on deep background to Washington Post reporter Bob Woodward. Felt's shadowy character was played in the 1976 film "All the President's Men" by Hal Holbrook. Read the 2005 story written by Rob Hutcheson, then a reporter in the Knight Ridder Washington Bureau.