Archive for August 2010
Weekly Audit: Why Do Deficit Hawks Hate Social Security?
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by Zach Carter, Media Consortium blogger
Last week, Social Security advocates learned something they had long suspected. Arguments for cutting Social Security aren’t really about economics or the deficit. They’re all about waging war on social services.
In short, some very prominent policymakers are out to dismantle Social Security on ideological grounds. The most recent example of this view comes from Alan Simpson, a former Republican Senator from Wyoming who now serves as co-Chair of President Barack Obama’s Federal Debt Commission. Earlier this summer, Simpson was caught on video spreading absurd lies about Social Security, but his latest outburst explains why he’s been so willing to distort the facts. Simpson simply hates Social Security.
As Joshua Holland highlights for AlterNet, Simpson fired off a nasty email to Ashley Carson, who advocates for elderly women, in which he referred to the most successful social program in U.S. history as “a milk cow with 310 million tits.” (more…)
Weekly Mulch: Fighting the Joe Millers of the World
by Sarah Laskow, Media Consortium blogger
Joe Miller, Sarah Palin’s choice candidate for one of Alaska’s Senate seats, does not believe in climate change. That didn’t bother Alaska voters: this week, Miller bested Sen. Lisa Murkowski in the state’s Republican primary.
If that weren’t worrisome enough, it also emerged that the fossil fuel industry spent eight times more than environmental groups on lobbying in 2009, the year the House passed the climate change bill. It’s been a bad year already for environmental causes, and as the November election edges closer, progressives might want to start working overtime to regain momentum on climate and energy issues.
Murkowski was solidly against the idea of the Environmental Protection Agency (EPA) regulating carbon. But she was willing to talk about cap-and-trade programs, and at the very least, she was willing to admit climate change was happening. Depending on how November’s election shakes out, the shift towards climate-denial in Congress may only worsen. A slew of Republican candidates are convinced that, as one put it, “only God knows where our climate is going,” as Care2 reports. (more…)
Weekly Diaspora: Immigrants Abused, Denied Social Services in Broken Immigration System
by Catherine A. Traywick, Media Consortium blogger
After decades of misguided policies and patchwork practices, the high human costs of our disordered immigration system are only starting to emerge. Stricter immigration policies and overcrowded detention centers aren’t making our streets safer or our social services more accessible.
Instead, mounting evidence shows that our immigration policies are just creating a space for immigrants to be brutalized—socially, financially and physically. From reports of sexual abuse inside of detention centers to news of legal residents being denied social services, the ineffectiveness of the prevailing system has never been more apparent, nor the need for reform so great.
Women and children sexually assaulted in detention centers
As Michelle Chen writes at Colorlines, allegations of sexual abuse within a Texas detention center have sparked investigations by the American Civil Liberties Union and Human Rights Watch. According to reports, a guard at the T. Don Hutto Residential Center sexually assaulted several women while transporting them prior to their release. (more…)
Weekly Pulse: Stem Cell Hell, Bad Eggs, and DIY Abortions
by Lindsay Beyerstein, Media Consortium blogger
On Monday, U.S. District Judge Royce Lamberth ruled that all federally funded human embryonic stem cell (hESC) research is illegal, thereby throwing the scientific community into turmoil. The judge decided that any experiments on these cells is research “in which a human embryo is to be harmed or destroyed,” and is therefore disqualified for federal funding under an obscure provision known as the Dickey Amendment. Researchers called the ruling “absolutely devastating.”
The ruling flies in the face of science and logic. True, a human embryo must be destroyed in order to create a line of stem cells. However, once the line is established, the cells will keep dividing forever. In nature, stem cells have the potential to develop into any kind of specialized cell in the body. There are no guarantees, but in theory, stem cell research could lead to treatments for anything from severe burns to heart failure to blindness.
The lineage of stem cells
The first line of human embryonic stem cells was created in 1998. In 2001, President George W. Bush banned federal funds for research on stem cells created after Aug. 9, 2001. Even Bush acknowledged using old stem cell lines wasn’t destroying embryos. In 2009, President Barack Obama loosened the rules for funding human embryonic stem cell research. Under Obama’s rules, researchers can’t use federal funds to create new hESC lines, but they can study stem cell lines of any age, not just the ones created before 2001.
According to the judge’s logic, a scientist is destroying an embryo when she tests a drug on an embryonic stem cell that is the great-great-great-granddaughter of a cell that belonged to a 5-celled embryo that was destroyed in 1998. Hundreds of scientists all over the world might be working with cells from that embryo at this very moment. According to the judge, each of them is destroying an embryo that ceased to exist 12 years ago. So, every day, they all get up, go to work and destroy the same non-existent embryo? What happens when they come back from their coffee breaks? Do they destroy it again?
Ignoring the facts
“We strongly disagree with the judge’s ruling because, by definition, embryos and stem cells are two entirely different organisms. Today’s ruling is the case of one judge ignoring the scientific fact that research on pluripotent stem cells is not the same as research on an embryo,” Rep. Diana DeGette (D-CO) said in a strongly-worded reaction to Monday’s ruling. DeGette is a longtime champion of stem cell research, according to Scot Kersgaard of the Colorado Independent.
Lynda Waddington of the Iowa Independent asked officials of at the University of Iowa, a center of excellence in stem cell research, how the ruling might affect their work. The officials declined to comment, saying that they were still reviewing the implications of the injunction. The Obama administration announced that it would appeal the judge’s ruling.
What’s next? Bioethicist Arthur Caplan told Amy Goodman of Democracy Now! that the only way to get hESC back on a firm legal footing would be to abolish the Dickey Amendment. Dickey needs to go, but the judge’s latest appeal to Dickey is extremely weak. The notion that studying a 1-day-old cell descended from an embryo destroyed 12 years ago is harming that embryo is absurd. Of course, getting rid of Dickey would also open the door for federal funds to create new stem cell lines, which would be a boon to society in its own right.
Bad eggs
Half a billion eggs have been recalled because they may be tainted with deadly salmonella bacteria. The eggs may have already sickened thousands of people. Democracy Now! reports that the entire batch can be traced to just two factory farms in Iowa, Hillandale Farms and Wright County Egg. This is the largest egg recall in U.S. history. Critics say the mass contamination exposes deeper failures in the U.S. food system.
Steve Benen of the Washington Monthly notes that Wright County Egg’s parent firm has a rap sheet of health, safety, and labor violations stretching back two decades. However, Benen argues, the problem is deeper than one poorly inspected operation.
After the outbreak, former FDA Commissioner William Hubbard admitted in an interview that the George W. Bush White House would not let the FDA impose tougher standards on the egg industry because the administration was “very hostile to regulation.” If the Invisible Hand of the Market tries to make you breakfast, don’t eat it!
Back alley abortions are back
More women are inducing their own abortions with a drug called misoprostol, Robin Marty reports at RH Reality Check. Misoprostol, aka “Cytotec,” is usually prescribed to treat ulcers. Doctors use it in combination with the so-called “abortion pill” RU-486 to induce chemical abortions, but only under controlled conditions.
Misoprostol is a prescription drug in the U.S., but it is available over the counter in many other countries. Some women misuse misoprostol that is prescribed for other conditions, some buy it on the black market, and some have families send it from overseas. Unsupervised misoprostol abortions are risky because about 10%-15% of the time, the drug will start the process but not finish the job. If that happens the woman is at risk for bleeding, infections, and other complications.
The anti-choice movement has campaigned for decades to throw obstacles in the path of women seeking abortions. The longstanding ban on federal funding for abortion means that many poor, uninsured women are stuck paying the costs of an abortion out of pocket. Even a few hundred dollars for the procedure and the cost of transportation to the nearest abortion clinic may be beyond the reach of many women. It’s not surprising that these women are taking matters into their own hands.
Thanks to the machinations of anti-choicers and the compromises of the Obama administration, health care reform will provide little relief for women who can’t afford abortions.
This post features links to the best independent, progressive reporting about health care by members of The Media Consortium. It is free to reprint. Visit the Pulse for a complete list of articles on health care reform, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Audit, The Mulch, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
Weekly Audit: Save Affordable Housing, Help Revive America’s Middle Class
by Zach Carter, Media Consortium blogger
Over the past decade, Fannie Mae and Freddie Mac transformed themselves into some of the worst-run companies in recent history. But contrary to current talking points, the firms’ failings had almost nothing to do with their programs for low-income borrowers. As policymakers debate what should be done with the mortgage giants, a battle is now beginning in which the very availability of affordable housing for the middle class may be at stake.
A history of affordable housing
As Tim Fernholz emphasizes for The American Prospect, before the U.S. government created Fannie Mae in 1938, mortgages were very pricey 5-year loans, so expensive that only very wealthy Americans could ever hope to own a home. Fannie Mae changed all that by rolling out the 30-year mortgage, which lowered monthly payments for borrowers by providing a government guarantee against losses for banks. It worked.
But as Fernholz notes, without some kind of government involvement in the housing market, home ownership will revert to its pre-Depression status a privilege reserved for elites. Policymakers will have to implement significant changes in the mortgage finance system to ensure stability in the U.S. housing market, but whatever changes may come, a robust role for the government in housing will be essential.
Fannie and Freddie have been justifiably but inaccurately maligned in the aftermath of the mortgage crisis. In recent years, their executives ran the firms like out-of-control hedge funds, lobbied Congress like arrogant Wall Street banks and did nothing beyond the bare minimum required by law to help low-income borrowers. But Fannie and Freddie did not go headlong into subprime mortgages—the primary source of their losses came from loans to relatively high-quality borrowers.
The terrible mortgages that crashed the economy were issued by banking conglomerates and Wall Street megabanks—Fannie and Freddie were almost entirely divorced from that line of business. The problem with Fannie and Freddie was largely structural– investors and managers saw the potential for big profits from taking on loads of risk, but believed (accurately) that the government would eat losses if those risks backfired. So Fannie and Freddie ramped up risk, taking on as many mortgages as they could while keeping as little money as possible on hand to cushion against losses. Eventually the strategy destroyed them.
Fixing the mortgage system
Exactly how the government stays involved in the mortgage market is still open to debate, as Annie Lowrey emphasizes for The Washington Independent. Nearly every member of the private sector who testified at a recent housing forum sponsored by the Treasury Department endorsed some kind of government backing for the housing market. This was a meeting of private-sector bigwigs—no community groups or affordable housing advocates were invited to speak at the meeting. Proposals ranged from scaling back government support for some types of mortgages, to the full nationalization of Fannie Mae and Freddie Mac (Fannie was a nationalized entity for the first 30 years of its existence).
In other words, the government is going to have to keep subsidizing housing, but it will have to find new ways to do it. The old Fannie and Freddie model didn’t work, but the private sector will be unable to get the job done by itself. Private-sector banks and mortgage brokers, after all, were the source of all the predatory loans issued during the subprime crisis, and the source of all of the most offensive loans that drove the economy off a cliff.
Inefficient and often predatory players on Wall Street are still causing problems today. As Ellen Brown highlights for Yes! Magazine, the mortgage system is so bizarre that banks are finding themselves unable to document their right to foreclose on properties—and courts are (fortunately) refusing to let them do it.
It’s a rare situation in which borrowers may actually hold the higher legal ground against powerful corporations. About 62 mortgages are registered through an electronic documentation system called the Mortgage Electronic Registration System (MERS), which helps banks with the foreclosure process. But MERS has repeatedly been unable to show proper documentation assigning a mortgage to a specific bank, and courts are now challenging its right to foreclose on behalf of big banks.
That’s good news, Brown notes, because MERS’ shoddy documentation has made it very difficult for borrowers to figure out who actually owns their loan. If you don’t know who owns your mortgage, it’s impossible to modify it if you find yourself unable to pay it off.
As Shamus Cooke argues for Truthout, even successful innovations like the 30-year mortgage are beginning to look a little outdated in an era of heavy, chronic unemployment. Many people can no longer expect to be gainfully employed for three decades on end. If the government refuses to repair our damaged jobs infrastructure, even simply maintaining the status quo in housing could become impossible.
Deficit reduction is not a cure-all
That brings us to another favorite conservative bogeyman, the federal budget deficit. The deficit and jobs generally stand in direct opposition. Creating jobs costs money, and spending that money expands the deficit. Cutting the deficit, by contrast, means cutting support for jobs.
As Steve Benen emphasizes for The Washington Monthly, conservative lawmakers are still harping on deficit reduction as a cure for everything that ills the nation, when the real solution to our problems is a serious jobs bill.
Even if the deficit were a huge problem, trying to cut important social services in the middle of a deep recession is not a good way to go about solving it. Drastic cuts to government spending in a recession result in lower tax returns for the government, which can often be self-defeating, especially in the face of expanding joblessness. The resulting push for deficit reduction—known in economic circles as an “austerity policy,” is better understood as the active pursuit of economic decline. As economist Robert Johnson notes in a New Deal 2.0 piece carried by AlterNet:
Deterioration of government services is bad enough, but imposing austerity due to lack of trust in a time of high unemployment and slack resources is tragic. It is a means to accelerate the decline of living standards of those who have taken a beating since 2007. Double dip or stagnation is too subtle a distinction. We are amidst an unfolding collective choice to pursue a downward spiral.
The government has taken several dramatic steps to repair the nation’s financial system, but it has done almost nothing to help troubled borrowers and not nearly enough to create jobs. Some of this is due to misguided policies enacted by President Barack Obama, and much of it is due to cynical obstructionism. But we cannot repair the economy without fixing jobs and housing. Both are still in a full-blown crisis, and policymakers should feel an urgent need to deal with them.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
Weekly Mulch: Green Daydreams? A Clean Gulf, Energy Efficiency, and More
by Sarah Laskow, Media Consortium Blogger
Yesterday, Rep. Ed Markey (D-MA) took Obama administration officials to task for encouraging Americans to believe that the majority of the oil in the Gulf of Mexico had dispersed.
“People want to believe that everything is OK and I think this report and the way it is being discussed is giving many people a false sense of confidence regarding the state of the Gulf,” Markey said.
Belief, after all, is powerful force. As coal baron Don Blankenship says, “You have to have your own beliefs, your own core beliefs, your own strengths and do what you think is right. You can’t do what others believe is right, you have to do what you believe is right.”
But what if your beliefs, even those backed up by science, are wrong? If you believed government officials who reported the oil in the Gulf of Mexico had dispersed—wrong. If you believed McDonald’s or Sara Lee really was helping save the planet—wrong. (Does anyone actually believe that one?) And if you believed you were conserving tons of energy by flicking off the light switches when you left the room—wrong again! (more…)
Weekly Diaspora: Has Obama Failed the Immigration Reform Movement?
by Catherine A. Traywick, Media Consortium blogger
After signing a controversial $600 million border security bill last week, President Barack Obama is drawing fire from immigration reform advocates and anti-immigrant conservatives alike. While the former argue that the new security measures are a step backwards for comprehensive immigration reform, the latter say the bill does too little to secure our borders.
Arizona’s SB 1070 was a challenge to the federal government’s ability to resolve the immigration issue, and the Obama administration took a strong stood against it. The border security bill is almost certainly a demonstration of the administration’s might. But for what, and at whose expense? (more…)
Weekly Pulse: Insurance, Dispersants, and Teen Botox
by Lindsay Beyerstein, Media Consortium blogger
Is the IV Bag half-empty or half-full? Theda Skocpol, the author of a forthcoming book on President Barack Obama’s health care reforms, argues in the Nation that progressives are underrating reform.
Skocpal urges progressives to get over their disappointment over the lack of a public health insurance option and rally around the president to support health care reform in the midterm elections. Skocpol maintains that, for all its flaws and limitation, the Affordable Care Act will be a powerful antidote to rising inequality in American society:
[T]he White House certainly had to make choices about what to emphasize in the brief time it likely had to make headway. The administration chose comprehensive health care reform and a few other measures with profound economic import—and those will make an enduring difference for millions of ordinary Americans. (more…)
Weekly Audit: Are Handouts For Billionaires More Important Than Feeding Children?
by Zach Carter, Media Consortium blogger
The crazy conservative assault on government spending has become one of the most irrational economic policy debates in recent years.
The Republican Party is trying to maintain the fiction that direct economic relief for millions of working Americans is a fiscally irresponsible splurge, while simultaneously backing hundreds of billions of dollars worth of economically useless tax cuts for the wealthy. The demands are staggering: cut food stamps for the poor, but preserve perks for billionaires.
As Tim Fernholz notes for The American Prospect, serious economists do not believe that President George W. Bush’s tax cuts for the rich are an effective way to stimulate the economy. Rich people don’t spend money, they save it. We need lots of consumer spending to reinvigorate economic growth and put people back to work.
If we want to create jobs, we need to put money in the hands of people who will spend it. At minimum, that means directing aid to the unemployed and providing federal assistance to states, so that local governments don’t lay off hundreds of thousands of teachers and cops. This is not only the decent, humane thing to do when the economy is struggling, it actually helps. Money the government spends to save a teacher’s job goes out into the economy to pay bills and buy products. For states, this also means that basic public infrastructure is preserved—kids learn and the streets stay safe.
Stonewalling aid
But as the editors of The Nation highlight, Republican politicians have made it nearly impossible to get that critical aid out to American families. They’ve demanded strict measures for these benefits, forcing Democrats to cut food stamps—that’s right, food stamps—in order to keep teachers in school and cops on the street.
Millions of families all over the country depend on food stamps. In the middle of the worst recession since the Great Depression, Republican politicians took a stand to take food from the mouths of children—and they did it while supporting a $300 billion a year in handouts for the rich.
There is no immediate budget crisis. The government can borrow money at record low interest rates, meaning that investors don’t believe the federal budget deficit is too big. But if conservatives were really serious about shrinking the deficit, they’d be encouraging economic growth, not backing billionaire giveaways.
Banking on predation
Our perverse economic policy preferences aren’t limited to budget priorities. As Amy Goodman and Juan Gonzalez emphasize in a segment for Democracy Now!, inadequate rules governing bank lending practices were a fundamental cause of the recession, and are actively hampering the economy’s recovery today.
The Community Reinvestment Act of 1977 (CRA) required banks to make good loans to credit-worthy borrowers in the bank’s community. The idea was simple: If a bank wants to benefit from a community’s resources, it has to give something back and help strengthen the local economy.
Conservatives have lashed out at CRA, blaming it for the mortgage crisis, but the truth is that CRA loans had almost nothing to do with the subprime disaster. CRA loans are affordable loans to creditworthy borrowers—the whole point of subprime lending was to charge outrageously high rates to borrowers with poor credit.
In reality, policymakers’ refusal to expand CRA exacerbated the crisis. Only traditional banks are subject to CRA guidelines, and during the past two decades a host of independent mortgage companies have taken over large swaths of the mortgage market. These unregulated firms issued a lot of lousy loans, often working under direct, explicit instructions from bigger banks, who outsourced their lending in order to get around CRA rules and rip off whole neighborhoods.
Lending is critical to moving the economy out of the recession, and CRA provides reliable, proven rules to get banks back in the business of helping our communities and our economy.
Overdrafting the banks
But a host of other banking policies are also making the recession worse. One of the most egregious is the overdraft fee, which, as Annie Lowrey notes for The Washington Independent, scored banks over $38 billion in 2009 alone. To put that in perspective, the entire banking industry earned a combined profit of $12.5 billion last year, which means that the banks are making their money from gotcha fees, not from productive lending.
Banks have spent years charging overdraft fees without telling their customers that they’re subject to such gouging. Lowrey notes that the average fee is $35 on an average charge of $17. But they also have engaged in a backdating scam, rearranging the order of their customers’ purchases in order to charge more overdraft fees. As I explain for AlterNet:
“Say you’ve got $80 in your checking account, and you decide to pay some bills and run some errands. You spend $30 on gas and another $20 on your water bill. Later, you head to the grocery store and spend $81—oops!—on groceries. To reasonable people, it looks like you’re going to get hit with an overdraft fee. That last purchase put you over the line. But instead, the banks reorder your transactions, processing the groceries first. Now you’re below zero, and they can charge additional fees for your gas and water bills. Wells Fargo charged up to $39 per overdraft. This one mistake cost you $117, and nobody even bothered to tell you it was going to happen.”
Fortunately, a federal judge in California just ruled that this backdating scam was grossly illegal, and ordered megabank Wells Fargo to pay back every penny that it swindled from its California customers with the practice since 2004. But Wells Fargo was not alone—every large bank in the United States does the exact same thing, and it’s allowed them to score billions in deceptive profits. A similar ruling in a larger case against all of the big banks could end a transparent outrage, and restore an enormous amount of unfairly seized wealth to citizens all over the country.
We don’t need to be pushing policies that benefit billionaires at the expense of everyone else. The Bush tax cuts are an unnecessary economic waste. Financial policy that puts the interests of a few giant predatory banks above those of the entire citizenry makes no economic sense.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
Weekly Mulch: Dispersants Harm Gulf Spill Workers
by Sarah Laskow, Media Consortium blogger
BP’s relief wells are just short of sealing off the Macondo well, the epicenter of the oil spill in the Gulf of Mexico. For the Gulf community, this milestone might herald a sigh of mental relief. But clean-up workers are feeling the after-effects of working with oil and the chemical dispersants used to dispel it, and physical relief is still a ways off.
Symptoms include…
There are plenty of reports about the toll relief work is taking on Gulf Coast residents who stepped in to clean the oil off sea waters and beaches. Many of these workers, idled from their regular gigs by the BP spill, had little choice about taking on these jobs. Inter Press Service has a particularly wrenching description:
“I was with my friend Albert, and we were both slammed with exposure,” Donny Mastler, a commercial fisherman told IPS. Mastler inhaled toxic chemicals he identified as dispersants, bubbling up white on the water’s surface.
Mastler’s symptoms began with watery eyes and a burning in his throat, he told IPS, but they worsened from there and included vomiting, discolored urine, sweating, and diarrhea. (more…)