'Live From Main Street' Archive
Weekly Audit: Radical Inequality Fueled the Wall Street Meltdown
Now that Treasury Secretary Timothy Geithner isn’t going to impose pay restrictions on bailed out Wall Street executives, it’s critical to remember that severe economic inequality was a major factor in the financial meltdown. Our tax code funnels money into the hands of our wealthiest citizens, which means that our financial system protects the interests of the affluent—not the the average citizen. The broad divergence between our core democratic values and the existing U.S. economic structure must become part of the public debate over financial reform.
As Les Leopold notes in a roundtable discussion with GritTV’s Laura Flanders, much of the Wall Street meltdown can be traced to a steady redistribution of wealth to the wealthy dating back to the Reagan years. Poor people, after all, do not have money to invest in the Wall Street speculation machine. By 2007, the financial world accounted for over 40% of U.S. corporate profits, an astounding percentage for a business intended to facilitate the operation of other industries. According to Leopold, we need to find constructive ways to shrink the financial sector, like taxing Wall Street transactions to move money into the real economy or imposing meaningful pay caps on financial jobs.
Pay for citizens who live outside the executive class has been steadily falling for decades. As Chuck Collins and Sam Pizzigati note for AlterNet, weekly wages for average Americans are now below 1970s levels after adjusting for inflation, while CEO payouts have exploded. So far, President Barack Obama has been hesitant to fight economic inequality at either end of the spectrum. Remember the promises he made to curb extravagant CEO pay on Wall Street back when the AIG bonuses were generating outrage back in February? Treasury Secretary Timothy Geithner has already made them irrelevant, eliminating a $500,000/year salary cap.
While we’ve heard quite a bit about how Wall Street excess wreaked havoc for homeowners, relatively little attention has been paid to the plight of renters, who often face personal catastrophe when their landlord is foreclosed on. Under a new law passed by Congress, when a bank or new owner takes control over a foreclosed property, they have to give renters living in the home at least 90 days notice before evicting them. But the law does nothing to address other injustices renters face. If your landlord is foreclosed on, for instance, you can forget about getting your security deposit back, even if the house is in top condition.
Banks also are not required to hire property managers to maintain homes they take over, which means they often let houses deteriorate despite objections from tenants. Writing for The Colorado Independent, Martha White explains that these problems are easy to correct, if Congress actually wanted to: Require landlords to put security deposits in a special account that cannot be raided by creditors in bankruptcy and force banks to hire managers to maintain the properties they foreclose on. The latter policy would also discourage banks from foreclosing in the first place by making ownership of the property more expensive for the bank.
Obama recognizes the need for change, which is why he’s proposed a major overhaul of the government’s Wall Street oversight. But in many ways, his plan identifies the wrong problems and offers the wrong solutions. The Real News features a great video spot with commentary by University of Massachusetts at Amherst Economist Robert Pollin. One of the key reforms involves granting the Federal Reserve broad powers to oversee systemic risk in the economy, but the Fed already has similar authority.
“The problem is, the Fed has already had an enormous amount of regulatory power, they just don’t exercise that power,” Pollin says.
Instead of granting the Fed more power, we should be finding ways to hold its leaders accountable. By subjecting top officials at the Fed to democratic elections, we could help ensure that the top regulatory body in the U.S. answers to the people it is supposed to be protecting.
Other creative new approaches to combating the economic crisis are featured in the most recent issue of Yes!, which is devoted entirely to economic reforms. From tips on investing locally to overhauling our broken monetary system to empowering workers, the issue emphasizes solutions that rely on democratic structures, rather than the corporate status quo (full disclosure: I’ve got an article in there on community banks).
It’s time to put some political firepower behind those ideas. Ordinary people simply have no serious voice in the policy debate surrounding Wall Street. In The Nation, Christopher Hayes describes the banking lobby’s total domination over financial reform proposals.
“On the other major legislative battles—healthcare, climate change, the Employee Free Choice Act—there is an organized, mobilized permanent infrastructure to push lawmakers in a progressive direction,” Hayes writes. “They may be underdogs, but at least it’s a fight.”
Changing the too-big-to-fail financial sector must become a priority. If we defer to the banking lobby or advisers like Larry Summers, who helped create the crisis by backing wildly deregulatory laws during the Clinton years, we can guess what the end result will look like. If we want our economy to answer to us, we have to do something about it. Income inequality and unaccountable regulators were a major part of the financial collapse. Addressing those problems has to be part of the economic solution.
This post features links to the best independent, progressive reporting about the economy. Visit StimulusPlan.NewsLadder.net and Economy.NewsLadder.net for complete lists of articles on the economy, or follow us on Twitter. And for the best progressive reporting on critical health and immigration issues, check out Healthcare.NewsLadder.net and Immigration.NewsLadder.net. This is a project of The Media Consortium, a network of 50 leading independent media outlets, and was created by NewsLadder.
Weekly Audit: Time to Shake Off the Bank Lobby
Filed under: Economy, Health Care, Immigration, Live From Main Street, Syndicated Reporting Project, Uncategorized
by Zach Carter, TMC MediaWire Blogger
While the national economy struggles under the weight of a massive bank bailout effort, the banking lobby’s ability to influence public policy is more problematic than ever. The too-big-to-fail bankers may be dependent on U.S. taxpayers for their survival, but corporate lobbyists still have members of Congress, the Treasury Department and the Federal Reserve asking the banks’ permission to bring the Big Finance behemoths under control. The relationship between Wall Street and the government is so out of whack that it’s difficult to distinguish the political players from the panhandlers.
In Mother Jones, Daniel Schulman and Jonathan Stein detail the ease with which important congressional staff switch careers and move into the banking sector. In recent years, dozens of key staffers for powerful Senators have left the political arena to work for as lobbyists for the financial sector, and policy gurus from both sides of the aisle are jumping ship for lucrative careers as influence peddlers on Wall Street.
“Financial firms seeking big bucks and favorable terms from Congress and the White House are deploying Capitol Hill aides turned lobbyists to win favorable treatment from the congressional lawmakers,” Schulman and Stein write. Many lawmakers, including Senate Banking Committee Chairman Chris Dodd, D-Conn., are refusing to disclose whether they’ve had contact with former staff who now work for Wall Street. Small surprise, then, that so many of the recent bailout packages have allowed failed bank CEOs to stay in power and saved their shareholders from bad investments in inept, even predatory, companies.
Sometimes these reinvented bank defenders are even former Senators. Susan Douglas of In These Times highlights the career of former Sen. Phil Gramm, R-Texas, who is currently a lobbyist for UBS. The Swiss banking giant has been plagued by a seemingly endless stream of scandals over the past year, for everything from diamond smuggling to tax fraud. And Gramm helped push for looser predatory lending laws—including those pertaining to the now-decimated mortgage sector—while he on the UBS payroll.
This would be a shameful legacy for any former public servant, but for Gramm, Douglas notes, this behavior is particularly disgraceful: his two chief legislative “accomplishments” helped create and intensify the current financial crisis. Gramm co-authored the Gramm-Leach-Bliley Act of 1999, which compounded the financial world’s too-big-to-fail problem by letting traditional commercial lenders like Bank of America and Citigroup buy up riskier, unregulated investment banks like Merrill Lynch. Gramm then pushed the Commodity Futures Modernization Act of 2000 through in a midnight budget amendment, a tactic which made sure that “credit default swaps” were not subject to either securities regulations or gambling laws. Just eight years later, credit default swap gambling destroyed insurance giant AIG, to the dismay of taxpayers everywhere.
When lawmakers stop cowing to the bank lobby and start answering to their constituents, the result is a big boost for the entire economy. Last week, committees in both the House and Senate dealt the credit card industry a rare defeat by approving bills that crack down on abusive credit card billing practices. Even though Sen. Dodd insists keeping his lobbying contacts a mystery, he is capable of crafting responsible legislation. The bills were introduced by Dodd and Rep. Carolyn Maloney, D-N.Y., but still face major uphill battles clearing the full House and Senate.
As Harry Hanbury details for the American News Project, conservative lawmakers and bank lobbyists are already hard at work watering down the legislative language to ensure that it will not actually curb any abuses if enacted. Take a look:
The bills would ban dozens of billing gimmicks that are as outrageous as they are common, including raising interest rates on credit card debt after it has been accumulated and hiking rates due to completely unrelated activity, like returning a library book late. The banking industry deploys a lot of clever words to mask the predation inherent in the tactics, and most common of all are the terms “price according to risk” and “risk-based pricing.” These phrases make it sound as if all the poor little credit card companies want to do is set interest rates at levels appropriate for a borrower’s credit profile. Of course, that’s not what’s actually happening: lenders are radically changing the terms of loan agreements for no other purpose than to gouge borrowers, and give borrowers no say in what happens.
It’s crazy that banks are legally permitted to raise interest rates on cardholders after they have charged debt to their credit card. If you pay full price for anything else—a shirt, a bag of groceries, a guitar—it would be laughable if the shop clerk demanded more money from you months later.
Banker apologists insist that banning these practices will restrict the flow of credit. But more credit cards will not fix a problem caused by massively over-indebted consumers. We need higher wages, not a fresh flood of predatory, high-interest debt.
But if taxpayers can win on credit cards, we can win on the bailout, too. Yes! Executive Editor Sarah van Gelder posted an open letter to President Barack Obama this week, citing half a dozen economic experts and urging him to change his bailout strategy before it’s too late. “Watching your appointees’ latest bank bailout makes me wonder if all your administration’s good work on health care, education, and jobs will be swept away by the extraordinary giveaway of trillions in taxpayer money to a group of powerful Wall Street operatives,” van Gelder writes.
And indeed, in other arenas of economic policy, the president has made significant steps in the right direction. While Obama’s proposed federal budget is less than perfect, it moves away from some of the worst trends of the past eight years. GritTV’s Laura Flanders details some of this progress in a roundtable discussion with Irasema Garza, President of Legal Momentum, former New York Times reporter David Cay Johnston, and New York City Coalition Against Hunger Director Joel Berg. By implementing robust job creation plans and a massive increase in anti-hunger and nutrition programs, Obama has signaled that the plight of those hardest hit by the recession cannot simply be ignored.
But these positive budget strides do not involve the banking lobby, which still maintains a stranglehold on any realm of U.S. public policy it can loot for a profit. Obama standing up to the financiers is not an improbable pipe dream, it’s a prerequisite for economic recovery and a necessary step toward rebuilding the integrity of our democracy.
This post features links to the best independent, progressive reporting about the economy. Visit StimulusPlan.NewsLadder.net and Economy.NewsLadder.net for complete lists of articles on the economy, or follow us on Twitter. And for the best progressive reporting on critical health and immigration issues, check out Healthcare.NewsLadder.net and Immigration.NewsLadder.net. This is a project of The Media Consortium, a network of 50 leading independent media outlets, and was created by NewsLadder.
Weekly Audit: Why the Current Stimulus Plan Isn’t Enough
by Zach Carter, TMC MediaWire Blogger
The U.S. economy just keeps getting worse. Given the absolute pummeling the job market has taken over the past five months, we’re going to need some much stronger medicine than policymakers are currently proposing. It’s increasingly clear that President Obama’s stimulus plan was devised for a far milder downturn, and this week we received further evidence of the recession’s high human cost.
The U.S. lost another 663,000 jobs in March, according to a report released by the the Labor Department last Friday. Most of us are getting used to seeing big numbers associated with this recession, but those massive layoffs are perhaps the most distressing statistics of all. Jobs matter most to ordinary people right now, as John Nichols notes for The Nation, and the primary measure of success for any economic policy is whether it will get people back to work. Nichol’s argument stands in sharp contrast to what much of the news media is using as its metric of success: the Dow Jones Industrial Average.
Speculators on Wall Street have pointed to the Dow’s recent upward trend as evidence that things are getting better. We’ll see if that uptick continues after the next round of quarterly banking losses comes in, but even if they do, Nichols emphasizes, happy speculators are not the same thing as a happy economy.
The national unemployment rate currently stands at 8.5% and, without a dramatic increase in government support, will likely be mired in double digits for years to come. Nobel-Prize-winning economist Joseph Stiglitz puts it succinctly in an interview at Salon: “This model no longer works. The Americans are completely over-indebted. They can’t increase their consumption, instead they have to save.”
The recession’s growing severity underscores a host of long-brewing economic problems, not the least of which is access to a college education. The cost of tuition has been steadily soaring for decades, but with the life savings of many families decimated by the housing bust, even relatively inexpensive state schools are out of financial reach, as Andy Kroll illustrates for Mother Jones.
“Simply to ensure that a child attends a four-year public university, a family in the country’s lowest-income bracket now has to pay, on average, 55% of [their] total income,” Kroll writes. That’s not 55% of disposable income, that’s 55% of what the family is taking in, period. President Obama has proposed some solid remedies for this issue—increasing federal grants for low-income students and replacing overpriced private-sector student loans with cheaper government loans, to name a few. But Kroll notes that it’s also important to divert more federal stimulus funds to states to increase the flow of need-based financial aid at public universities.
For many younger students, attending college takes a backseat to making sure they have a roof over their heads. One out of every 50 children in the United States is homeless. This problem will not go away on its own, Randy Jurado Ertll writes for The Progressive. Ending homelessness for children would cost just a fraction of what we’re paying to bailout the nation’s largest banks—there is no excuse for ignoring the issue in the next round of recovery funding.
The housing collapse continues to deepen, but some policies designed to help families keep their homes are quietly expiring. In a story for The Colorado Independent, Mary Kane points out that the moratorium on foreclosures imposed by mortgage giants Fannie Mae and Freddie Mac expired at the end of March. Foreclosure-related evictions are set to resume. Just as depressing: none of the mainstream media seems to have noticed.
As foreclosures escalate, one policy option that would keep families with a roof over their heads is being generally ignored by both the government and the banking world: renting. If, Kane notes, banks rented foreclosed properties to the borrowers who can no longer afford them, the most devastating impact of the foreclosure crisis could be averted.
But instead of dealing with actual problems, some Senators remain more focused on throwing money at rich people. The estate tax has actually surfaced in the recent haggling over the federal budget, Steven Benen notes for The Washington Monthly, a tax that only applies to the richest 0.2% of American families.
We’ve seen enough giveaways to wealthy people in the recent bank bailouts, and we know that they have extremely limited economic benefits. Steering the economy toward recovery will require a much more aggressive investment in the livelihood of ordinary Americans.
This post features links to the best independent, progressive reporting about the economy. Visit StimulusPlan.NewsLadder.net and Economy.NewsLadder.net for complete lists of articles on the economy, or follow us on Twitter. And for the best progressive reporting on critical health and immigration issues, check out Healthcare.NewsLadder.net and Immigration.NewsLadder.net. This is a project of The Media Consortium, a network of 50 leading independent media outlets, and was created by NewsLadder.
Weekly Audit: Workers will build the recovery, not Wall Street
With new bailout plans for Wall Street being unveiled almost every week, it’s easy to forget that nearly all of the work that fuels our economy takes place outside of Manhattan. While reviving the financial sector is an important part of recovery, any lasting economic solution must also empower American workers and protect them from corporate abuses.
Workers’ rights are a core issue for our democracy, as progressive icon Noam Chomsky argues in an interview with Paul Jay of The Real News. The discussion covers the current economic crisis and its implications for the democratization of the U.S. economy. It’s a fascinating exchange. In the video below, Chomsky advocates for a much broader palette of reform than a simple clean-up the financial sector.
Chomsky notes that while the recent bank bailouts have brought a great deal of attention to the disconnect between public investment and private profit, it has become routine for the taxpaying public to foot the bill for important research that eventually creates big corporate profits. To ensure that we all reap the benefits of our investments, it is essential to make institutions accountable to their communities, rather than exclusively dedicated to maximizing shareholder returns.
The first step in democratizing the U.S. economy, according to Chomsky, is promoting unionization by enacting the Employee Free Choice Act, which makes it easier for workers to organize.
“The Employee Free Choice Act is always misrepresented,” Chomsky says. “It’s described as an effort to avoid secret elections. It’s not that. It’s an effort to allow workers to decide whether there should be secret elections, instead of leaving the decisions entirely in the hands of employers.”
EFCA would give workers more control over their circumstances, leading to improved wages and living standards for laborers. In a column for The American Prospect, Terence Samuel points out that even if Treasury Secretary Timothy Geithner’s plan to bailout Wall Street succeeds in stabilizing the banking sector, banks can do little to bring about recovery if U.S. citizens are all broke. If we want to get out of the bubble-and-bust cycle, we must establish a middle class that has money to spend. Fundamentally, that means raising wages.
Robert Eshelman puts the plight of today’s workers into focus in a devastating piece for Salon. Even where clear, straightforward laws to protect laborers from predatory employers exist, major corporations have been able to use the fear of being fired to push employees into “voluntarily” working under illegal conditions (Wal-Mart just agreed to pay out $640 million to settle charges that it intimidated its own employees into skipping mandatory breaks and accepting pay rates below the minimum wage).
“If corporations were able to exert such coercive power when the unemployment rate was around 5 percent, what can they do in a job market in which 14.8 percent of the population can’t find adequate work?” Eshelman asks.
Under the Bush administration, the U.S. Department of Labor systematically ignored its duty to enforce labor laws. Writing for Colorlines, Michelle Chen highlights a report from the Government Accountability Office that takes the Department to task for failing to even return phone calls from workers who complained about employer abuses.
Millions of jobs are hanging in the balance as President Barack Obama formulates his rescue plan for the U.S. auto industry. But while the administration has insisted that factory workers at GM and Chrysler have to accept wage cuts, they’ve almost bent over backwards to funnel bonus money to executives at failed insurance giant AIG. General Motors’ CEO Rick Wagoner has stepped down at the Obama administration’s request, and while it’s hard to feel sorry for an executive who lobbied aggressively against the environment and ran his company into the ground, his ousting reflects Wall Street’s privileged status in Washington. As Josh Marshall highlights in Talking Points Memo, it is astonishing that executives at Bank of America and Citigroup, who have put taxpayers on the hook for far greater sums of bailout money than GM and Chrysler, have not been subjected to the same treatment as Wagoner.
We’ve all seen the grim statistics indicating how severe the current economic crisis really is, but the proliferation of roving tent, shack and lean-to communities along U.S. railways underscores the true costs of the recession more grimly than any consumer spending metric or gross domestic product projection. All over the United States, people who cannot afford even rental housing are living in makeshift structures without access to basic amenities. It’s much like the rise of Hoovervilles in the late 1920s and 1930s, where out-of-work laborers took up residence anywhere they could.
While these squatter communities are growing as the crisis deepens, the worst part of the whole phenomenon is that they were common before the current downturn, as Scott Bransford notes for High Country News.
Whatever happens on Wall Street, fixing the economy will mean making sure ordinary people have access to basic amenities, and guaranteeing that workers have the power to prevent abuses from corporate America’s executive class.
This post features links to the best independent, progressive reporting about the economy. Visit StimulusPlan.NewsLadder.net and Economy.NewsLadder.net for complete lists of articles on the economy, or follow us on Twitter. And for the best progressive reporting on critical health and immigration issues, check out Healthcare.NewsLadder.net and Immigration.NewsLadder.net. This is a project of The Media Consortium, a network of 50 leading independent media outlets, and was created by NewsLadder.
Weekly Audit: Filling FDR’s shoes
The Great Depression permanently changed the government’s role in the U.S economy, and it appears increasingly plausible that the current recession will have an equally lasting policy legacy. The bailouts orchestrated by the Bush administration have been an absolute mess, but they present an opportunity to create new consumer protection-oriented economic programs the likes of which we haven’t seen since the days of Franklin Delano Roosevelt.
As Mark Schmitt explains in a piece for The American Prospect, establishing a government entity in any sector—banking, health care, education, etc.—that serves as a gold standard for consumer protection will force the private sector to offer similar services to compete with the attractive government program.
In essence, the goal is to align private sector profits with public benefits, not unlike what FDR did with housing during the Great Depression, when the government started offering people radical new 30-year mortgages at affordable interest rates. In short order, banks switched from five-year loans to long-term loans, and a new class of homeowners was created.
President-elect Barack Obama’s economic stimulus legislation looks to make the same kind of bold economic overhaul, and while the proposal has some real problems, it seems clear that Obama is going to take serious action to reverse the economic slide.
Writing for The Progressive, Matthew Rothschild applauds virtually every policy point Obama has presented in making the case for his first major piece of legislation, from financial regulation to expanded broadband access.
This is not to say that significant hurdles are not ahead. Rothschild echoes economists of varying ideological stripes by expressing concerns that the bill is too small and will not be enacted fast enough. Congressional Democrats are already voicing uneasiness over the potential effectiveness of some of Obama’s proposed tax cuts, and the stimulus bill itself is not likely to tackle every policy priority Obama has advocated (Congress is likely to tackle regulatory affairs in separate legislation, for instance).
But as Steve Benen articulates for The Washington Monthly, the current policy debate is very different from the political bed-wetting among Democrats that we have grown accustomed to over the past eight years. Democrats are actually governing.
“It’s important for policy makers to act as quickly and effectively as possible, but there’s nothing wrong with a collaborative process in which an administration and leading lawmakers engage in some back-and-forth,” Benen writes.
In at least one sense, the stimulus bill has already notched a meaningful victory. Namely, everyone from CNBC to The American Prospect is talking about economics as a realm in which the government can play a constructive role. The victory is not total: there are still nay-sayers on spending over at the Wall Street Journal’s editorial page, and members of the reality-proof economics department at George Mason University will be quoted extensively in AP-style newspaper reports for the next few weeks to give stories illusory ideological “balance.” Nevertheless, there is a general consensus for aggressive government action the economic front, and the public discourse is now focused on which courses of action are appropriate.
Josh Marshall offers one such critique over at Talking Points Memo. Marshall notes that while the debate between Congress and the Obama administration has been constructive in some ways, the negotiating strategy remains something of a gamble. Obama is starting small—Paul Krugman, for instance, believes Obama’s proposed $775 billion bill will only close about one-third of the economy’s output gap. Obama may be hoping to allow the legislative process to build the bill into something large enough to withstand the current economic headwinds. But if that is the case, Marshall contends, Obama also risks loading the package down with politically damaging and economically unproductive pet projects.
“If you get deep into a lot of bidding and horse-trading you get more parochial interests in the mix,” Marshall writes.
Over at The Washington Independent, Mike Lillis details problems with various tax cuts Obama has rolled out for the stimulus. Major losers include a $3,000 incentive for companies not to lay off current employees, which appears unlikely to change any HR habits, and a corporate “net operating loss carryback” extension, which results in a huge giveaway for companies that take losses this year—notably banks who have already been bailed out (at least) once in recent months.
There can be no doubt that the economy is getting worse. The U.S. lost 524,000 jobs in December, bringing total yearly job losses to 3.6 million, and boosting the unemployment rate to 7.2%. New America Media highlights a report by Hispanic Business detailing how minorities have been disproportionately affected by the downturn. The unemployment rate among blacks soared to 11.9% in December, while 9.2% of Hispanics looking for a job didn’t have one.
The unemployment rate covers one of the most damaging aspects of the recession, but it’s also important to remember that Wall Street’s success in pushing workers into the sham 401(k) industry has also decimated the retirement savings of millions of Americans who were about to leave the workforce voluntarily.
In a 401(k) account, a worker pledges a certain amount of his wages every paycheck to a fund managed by an investment manager. Over time, these investment experts are supposed to maximize the returns in this fund, to provide better-than-market growth in the employee’s retirement account.
But 401(k) plans almost never actually work like that–they consistently score lower returns than broad market indexes like the S&P 500. You’d be better off in many cases just betting on the Dow than turning over your money to these guys. What’s worse, you pay them a fee to screw you over. As Dan Solin puts it for The Huffington Post:
“The 401(k) system is a disgrace. Employers get paid off in the form of subsidies to select brokers and advisors who control the investment options in the plan. They, in turn, get paid off by fund families and insurance companies which limit employees’ investment options to costly, under-performing funds.”
None of the major 401(k) managers saw this year’s stock declines coming, and as a result, most people whose retirement is bundled into a 401(k) plan can’t retire any time soon.
The current economic climate leaves very little room for forgiveness on almost any policy, which makes living up to FDR’s economic standard an extremely difficult task. Fortunately, Obama seems to recognize there is no other choice.
This post features links to the best independent, progressive reporting about the economy. Visit Economy.NewsLadder.net for a complete list of articles on the economy, or follow us on Twitter. And for the best progressive reporting on critical health and immigration issues, check out Healthcare.NewsLadder.net and Immigration.NewsLadder.net. This is a project of The Media Consortium, a network of 50 leading independent media outlets, and was created by NewsLadder.
Your Streets, Your Stories: What Live From Main Street Found on the Trail
I’ve been wondering how I and other women can together turn our national narrative around to one of peaceful cooperation, economic creativity and healing our environment so we can thrive. … I think so many of us are tired of living in fear, tired of having our creative hopes marginalized, tired of war talk and war plans. We’re ready to brainstorm together and build.
I hope that The Media Consortium can continue Live From Main Street. It is really powerful. … I felt like I was part of a meaningful conversation with other citizens and great, down-to-earth journalists. You are helping us become involved. Please keep up this great work–this is journalism at its very best.
-Audience member’s response to Live From Main Street Seattle.
In a world of political sound-bites and talking heads, it’s nearly impossible for everyday people and grassroots leaders to get the attention of the media. In June, The Media Consortium launched Live From Main Street, a five-episode town hall series hosted by Laura Flanders that set out to overcome that challenge. We wanted to go beyond horse-race campaign coverage to uncover how issues like the housing crisis are impacting communities around the country–and to shine a light on the grassroots activists that are making a difference. Live From Main Street traveled to Minneapolis, Miami, Denver, Columbus and Seattle to seek out the voices ignored by the mainstream media.
Along the road we encountered a lawyer organizing in advance of massive citizen and journalist arrests at the Republican National Convention, a homeowner who had to choose between living in decrepit and dangerous public housing and taking a bad loan to give safe shelter to their children (guess which one they picked), individuals leading the way for a new green economy, organizers who were working to stop illegal voter purging, and last but not least, women military experts who put a new spin on national security. (more…)
Real National Security Begins at Home, Say Women Leaders
Bobbie Wrenn Banks of WAND’s Great American Pie campaign demonstrates what’s left for all other discretionary national spending after the Pentagon gets its piece of the pie. (Photo courtesy Arkansas
WAND)
Has defense spending become the new patriotism? Even as homeland security funds dwindle, the Pentagon now sucks up 54 percent of the federal budget. Yet politicians rarely challenge the current formula, fearful of being tagged as “weak.” Meet the leaders who say it will take women to fix our nation’s defense priorities.
Times are tough. Wall Street has tumbled, and Main Street is squeezed. As housing values plummet and people lose income, governments are also feeling the pinch. Despite it all, there’s one area of the federal budget that continues to grow: defense spending.
A growing chorus of women leaders are rising in protest, seeking to educate voters on the perils of a dangerously unbalanced set of priorities. From spending cuts in state budgets in such bread-and-butter areas as public health and sheltering the homeless, to a dangerous underfunding of port security and an exodus of first responders to the wars in Iraq and Afghanistan, women are seeing the Pentagon’s growing share of the federal budget take a toll on the well-being of their own families. Yet an absence of women in the halls of power helps maintain the status quo, say activists, and a failure to enlist military women as allies in the cause of national security reform has held back the progressive funding agenda.
Women are paying attention to who’s getting federal dollars, says Celinda Lake, the Democratic pollster who leads Lake Research Associates. In focus groups, says Lake, “we do have women volunteering …that they wonder how we could find overnight all the money to fight a war and to bail out Wall Street, but we can’t find enough money to provide national health care reform. And there’s a lot of anecdotal evidence of that.”
Meanwhile, in Washington, a consensus is building among defense experts that something needs to be done to straighten out those priorities for the very sake of what all that spending is supposed to buy us: real national security. While tax dollars are poured into the pockets of defense contractors for projects of debatable value or documentable waste, homeland security budgets are starved, leaving the nation vulnerable in the face of attack. Yet defense spending sops up more than half of the federal discretionary budget.
What’s pie got to do with it?
At Women’s Action for New Directions, field director Bobbie Wrenn Banks has taken to the road with a victual demonstration of the classic pie chart that WAND calls the Great American Pie project.
“We actually use a pumpkin pie – literally, a pumpkin pie,” Banks explains. “And we go into groups and we slice the pie; it represents the discretionary budget.” The discretionary budget is the piece of the federal budget that gets negotiated between the president and Congress (unlike such programs as Social Security and Medicare, whose costs are mandatory expenditures). “And over half of that pie – 54 percent of that pie – that slice goes to the Pentagon,” says Banks. “Then we have very small little slivers of pie that go to environmental concerns, income security, affordable housing…” And that doesn’t even cover the costs of the wars in Iraq and Afghanistan, Banks says. Add in the nearly $200 billion that taxpayers have anted up for the wars in this year alone, and “we’re spending nearly $700 billion a year on the military,” she says.
Banks’ pie show is headed this week to Mississippi, where she’ll visit the district offices of Sen. Thad Cochran, the Republican ranking member of the appropriations committee.
Absent a pie-bearing visit from Banks herself, she advises women to take a look at an effort at reform outlined in the Unified Security Budget proposed by the left-leaning group, Foreign Policy in Focus (part of the Institute for Policy Studies), which looks at how the budget is divided among various security needs. “[W]hen you look at the overall security spending pie, it’s just so staggeringly lopsided, because 90 percent of our security money goes to the offense, with a 6 percent slice of that pie going to… homeland security, and only a 4 percent slice going to (conflict) prevention.” Prevention includes diplomacy, foreign assistance in the form of infrastructure-building, and activities such as those done by the Peace Corps.
States starved for security
As president of the Women Legislators’ Lobby, Nan Grogan Orrock, a state senator in Georgia, knows all too well how the dearth of homeland security funding plays out on the ground. “You’ve got an array of issues around homeland security, around the railroads, and the freight containers, you know, the ports and the whole baggage and cargo screening,” says Orrock. “They need another $ 1.25 billion just to meet what are considered appropriate standards for cargo and baggage screening.”
Earlier this year, 339 women state legislators signed WiLL’s letter [PDF file] to members of Congress, asking them not to increase the Pentagon’s budget. “At least 22 states in the country have budget gaps, and 29 states…have had to cut their budgets to try to balance them,” Orrock says. “We have seen cuts to rape crisis centers and domestic violence shelters, cut anywhere from 38 to 42 percent of their state funding…and yet, under these Bush military budgets, we’re spending more than at any time on the military since World War II.”
But Lorelei Kelly, policy director for the White House Project’s Real Security Initiative and a member of the task force that put together the Unified Security Budget, cautions against riding roughshod on the military itself. “The first thing you shouldn’t say, always, is ‘Cut the military’s budget, cut the military’s budget,’” asserts Kelly, who co-authored, with Army Reserve Lt. Col. Dana Eyre, A Woman’s Guide to Talking About War and Peace [PDF file]. “Talk about the need for national security reform, and within that, that military’s budget has to change. And let’s not just go in with a bunch of hacksaws and blindly start whacking away at things.”
Members of the military, Kelly contends, can be progressives’ best allies when trying to enact reform. Too often, she says, progressives have lumped in with the institutional military everything bad about the military-industrial complex, alienating potential partners. Among the real culprits in the budget dilemma are the procurement process and the contracting out of work that used to be done by soldiers. “It’s appalling, the level of privatization that’s happened within the military budget, and of the service,” Kelly explains. “The institution itself has been very badly damaged in many ways.”
Service members, especially women, are often less than happy with the ways in which contracting and privatization affect their mission, and can be helpful to the cause of reform if asked the right questions in a respectful way, says Kelly. She notes a 2005 House hearing on possible exit strategies for the Iraq war at which former Air Force Under Secretary Antonia Chayse testified. In hearings convened by Sen. Byron Dorgan, chairman of the Democratic Policy Committee, Bunnatine Greenhouse, the highest-ranking civilian in the Army Corps of Engineers, blew the whistle on waste and fraud committed by contractors to the military in Iraq. In fact, if you scroll through the report issued by Dorgan’s committee, you’ll find that in the course of the last three years, many of the the whistleblowers on abuses by military contractors have been women.
Women could change the national security equation
One could argue that the lopsidedness in the federal budget that favors defense contractors exists in inverse relationship to the number of women in the halls of power. (Among the 188 countries listed in the International Parliamentary Union’s index of Women in National Parliaments, the U.S. ranks number 69 in its representation of women in the national legislature; Afghanistan’s rank is 27.) “While there’s nothing being biologically special about women being able to champion peace, I do believe that the life experiences and perspectives that women bring serve these issues well,” Banks says. When it comes to domestic spending, she says, women tend to lean to the progressive side.
Then there’s the matter of Iraq itself. “You have a pretty big gender gap on the war,” Lake explains, who co-authored, with Republican pollster Kellyanne Conway, the book, What Women Really Want. “You have men thinking it was worth it to go in, women thinking it wasn’t — which is interesting, given that both men and women are against the war…”
In an August Lake Research Partners/Tarrance Group Battleground poll, likely voters were asked the question: “All in all, do you think the war in Iraq is worth fighting, or not?” Among men, 50 percent said the war was worth fighting, 45 percent said it was not. However, only 35 percent of women said it was worth fighting, while 57 percent said it was not – a double-digit spread on either side of the equation.
Even women in the military see the war differently from their male counterparts. As early as 2005, a poll by Military Times found that 63 percent of men among the active service members they surveyed “said they believe(d) the United States should have gone to war in Iraq, but only 42 percent of the women believe(d) that.” Less than half of the women service members said they approved of the way President Bush was “handling the war,” while 65 percent of the servicemen did.
If more women were in Congress, says Banks, you’d see a difference in the ordering of priorities. “Women in Congress vote more progressively on many issues,” Banks says. In the 109th Congress, WAND reports, women voted for progressive policies in 67 percent of those votes, compared to 48 percent for men. The votes WAND examined fell within the categories of national security, and legislation affecting children, women, and the environment.
Women are naturals at the sort of skills required to effect real security, Kelly asserts. In Afghanistan, the U.S. counterinsurgency plan calls for the creation of constituencies that have a stake in seeing democracy succeed, she explains. “Women are really good at creating stakeholder constituencies in the public,” Kelly says. “Doesn’t everybody know a woman who holds the neighborhood together? That’s a strategic security skill in today’s world.”
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This article is part of The Media Consortium’s Live From Main Street series, and is published in conjunction with the next Live From Main Street program, “Beyond Hockey Moms and Palin Politics: Women on Real National Security.” Hosted by Laura Flanders of GRITtv, the town hall will feature a number of progressive women leaders, including Ports Commissioner Gael Tarleton; Erin Solaro, author of Women in the Line of Fire: What you should know about Women in the Military, Carol Kessler, director of Center for Global Security for Pacific Northwest National Lab and co-chair of Women in International Security; Rep. Maralyn Chase, Washington’s 32nd D;strict and Washington State director for the Women Legislators’ Lobby; Kristin Rowe-Finkbeiner, executive director of Moms Rising; Rosalinda Guillen, co-founder and executive director, Community to Community Development; Martha Burk, author and money editor at Ms. magazine; Sarah Van Gelder, executive editor at Yes! magazine.
This edition of Live From Main Street will tape on Sunday, October 26, 2008, at 7:00 p.m. EDT/6:00 p.m. CDT/4:00 p.m. PDT in Seattle. The town hall will be streamed live and can be viewed at www.livefrommainstreet.org. The taping is open to the public: click here for more details; Click here to RSVP to this event.
