Posts tagged with 'Ezra Klein'
Weekly Audit: Curbing Decline in 2009
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In 2008, we witnessed the first serious fallout from deep structural flaws in the relationship between the nation’s public and private sectors, a relationship which fell short in every conceivable area from Wall Street regulation to the basic social safety net. The biggest economic stories of 2009 will be about how President-elect Barack Obama’s administration repairs—or fails to repair—that connection.
The first step in rebuilding a government that actually responds to problems before they reach the bailout stage will be Obama’s highly anticipated economic recovery package. As Dean Baker notes for The Huffington Post, the failure to date of Congress to pass meaningful stimulus legislation has been beyond negligent. Several Congressional leaders are cautioning that a bill will not be ready until February, but with more than two weeks to go before Obama’s inauguration, Congress has both the time and the public support necessary to pass a major bill before Obama takes up a chair in the Oval Office, as anyone who remembers the speed of Congressional action moved on the Wall Street bailout can attest.
The content of the legislation will reveal a great deal about Obama’s priorities. No president since Franklin Delano Roosevelt has entered office with an economic mandate as clear as that Obama enjoys, but one early warning sign for progressives is this week’s news that Obama plans to devote as much as 40% of the bill to tax cuts, a number that could go higher in legislative haggling with Congressional Republicans.
In a blog post over at The Washington Monthly, Hilzoy highlights the well-established economic fact that tax cuts are the least efficient method for boosting economic activity. Remember the February 2008 economic stimulus bill? Fat lot of good those $600 tax rebates did.
Public investment in areas like health care, green energy and research into sustainable manufacturing also leaves a stronger economy in its wake, and spending on basic infrastructure projects—roads, bridges, etc.—has been sorely neglected for the past eight years.
What’s more, as Ezra Klein notes for The American Prospect, the U.S. government seems to be in perpetual tax cutting mode, whether economic times are good or bad. While cutting the right taxes amid a severe recession can be justified, President George W. Bush’s decision to take a chainsaw to the IRS code during an economic boom cannot become a permanent facet of U.S. policy.
Imperative services provided by state governments are currently in severe jeopardy amid tax shortfalls prompted by lower housing values. The Public News Service discusses budget problems in Michigan and Missouri in pieces by Tony Bruscato and Laura Thornquist. Michigan faces cutbacks in health care for the poor and college tuition assistance programs, while Missouri needs to fill a $900 million hole by 2010.
State and local governments are likely to be $200 billion underwater next year, according to a piece by Robert Kuttner appearing in Chelsea Green. Even if Obama does not want to tackle major issues like universal health care in his first 100 days in office, he could fund community health clinics and make sure police officers, firefighters and teachers do not lose their jobs.
It has been easy to forget amid the mortgage market news of 2008 that other aspects of the economy have been under intense strain. In a frightening interview with The Real News, Leo Panitch details how a drop-off in working-class wages, fueled by a decades-long decline in the power of organized labor, has forced millions of Americans to turn to expensive consumer debt just to make ends meet.
That surge in credit card debt has been accompanied by a refusal on behalf of the federal government to place meaningful regulations on credit card lending practices. The Federal Reserve finally took steps in December to rein in deceptive credit card lending, but as Mike Lillis demonstrates for The Colorado Independent, the new rules are relatively modest given the scope of credit card-related abuses. Lenders can still do pretty much anything they want to a borrower once they miss a payment, and the Fed’s restrictions do not even go into effect until July 2010.
If low wages and predatory credit cards are not enough to push consumers into financial ruin, consider what is taking place in the student loan industry. The government keeps the student loan market going in two primary ways: by directly lending to students and by guaranteeing loans students take out from private lenders like Sallie Mae, making it cheaper for Sallie Mae to extend loans. The government-assisted private sector loans cost taxpayers significantly more money than loans made through the direct loan program.
When student lenders hit the skids this year amid a Wall Street-induced credit crunch, the government responded by financing student loans made through private companies.
But if the government is not only guaranteeing private-sector loans but financing them as well, the resulting scheme is essentially a less efficient version of the direct loan program, as Cole Robertson explains in a piece for The Nation. Sallie Mae CEO Albert Lord seems to approve of the bailout plan, but has not offered to return one penny of the orgiastic pay he’s accumulated over the past year in return for this taxpayer largess. Lord cashed out over $44 million in stock options in one day during the summer of 2007, and has been targeted by Congressional insider trading investigations for convenient sales of Sallie Mae stock.
A big federal bailout accompanied by outrageous executive compensation. Sounds familiar.
It is truly astonishing to consider how much damage conservatives have done to public attitudes on economic issues over the past 14 years. There is nothing inherently progressive about policy suggestions like like funding emergency health care, paying firefighters and teachers or refusing to allow lenders to arbitrarily change the terms of a contract without borrower consent. This stuff is basic sanity. At least 2009 promises not to be boring. We will either witness a return to said sanity that would have been unthinkable even a year ago or another depression. Happy New Year.
This post features links to the best independent, progressive reporting about the economy. Visit Economy.NewsLadder.net for a complete list of articles on immigration, 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.
Hilda Solis: Get Excited
Update: At 2:15 today, President-Elect Barack Obama confirmed the nomination of Rep. Hilda Solis,D-Calif, for Secretary of Labor.
President-elect Barack Obama has named Rep. Hilda Solis, D-Calif., as the next administration’s Secretary of Labor and is expected to formally announce the selection this afternoon. To put it simply, progressives are ecstatic about the pick.
“If you were to sketch an ideal Labor Secretary, you could hardly do much better,” Jonathan Stein writes for Mother Jones.
“Solis should make progressives feel pretty good,” according to Steve Benen of The Washington Monthly, who calls her nomination, “a big win for unions.”
Why all the excitement? As Harold Meyerson details in a great profile for The American Prospect, Solis led the successful push to raise California’s minimum wage in 1996, diverting funds from her own State Senate political account to fund a signature-gathering campaign that culminated in the measure’s passage over strong resistance from Republican Gov. Pete Wilson.
Solis doesn’t just have passion and patience, she’s got guts. When she ran for the House of Representatives in 2000, she took on a 9-term Democrat with a terrible record and absolutely trounced him in the primary, going on to win back California’s 32nd District for the left.
“In the House, Solis has continued to champion labor causes, immigrants’ rights, women’s health and environmental protections,” Meyerson writes.
She has a 100% rating from the AFL-CIO, and as Meyerson’s fellow Prospect-er Ezra Klein notes, she has successfully defused tensions between immigrant laborers and older union workers who viewed immigrants as a threat.
And then there’s her personal story. As the daughter of union worker immigrants from Nicaragua and Mexico, Solis embodies America’s most-prized and rarely realized ideal: the promise of opportunity for all citizens that rewards hard work.
The Labor Secretary position can be either enormously powerful or completely irrelevant, as demonstrated by the contrast between the tenures of President Bill Clinton’s first Labor Secretary, Robert Reich, and that of current Secretary Elaine Chao. In just four years, Reich secured the passage of the Family and Medical Leave Act, the Pension Protection Act and the School-to-Work Jobs Act, raised the minimum wage and still had time to call out deregulation ideologue, budget hawk and Treasury Secretary Robert Rubin on his reckless lunacy. Chao’s only accomplishment after eight years is a 2003 rule that denied overtime pay to 6 million workers. Progressives can trust Solis to ensure that the Department of Labor will finally be going to bat for laborers again.
This post features links to the best independent, progressive reporting about the economy. Visit Economy.NewsLadder.net for a complete list of articles on immigration, 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.
The Weekly Pulse: Public Insurance Would Work Too Well and We’d Like It Too Much, Republicans Warn
A common thread is emerging in the right wing response to healthcare reform. Its opponents aren’t claiming that public healthcare will be bad. Rather, they are terrified that the new system will be so good that no citizen would buy expensive private insurance–or vote for politicians who wanted to take public insurance away.
The Obama team is sending clear signals that healthcare reform is a core economic issue, and the health insurance industry is becoming increasingly anxious by the future administration’s determination to bring healthcare costs under control. Some Americans are seeing their healthcare premiums rising at four times the rate of inflation, if they have insurance at all. Healthcare reform is a pocketbook issue for all of us, according to the Obama team.
In tough economic times it might be tempting to postpone healthcare reforms, but Obama is adamant that delay would be a false economy.
In the American Prospect, Joanne Kenen and Sarah Axeen support claims about the high cost of doing nothing:
A recent report by the New America Foundation’s health-policy program estimates that the cost of doing nothing about health care, including poor health and shorter lifespan of the uninsured, is well above $200 billion a year and rising. That’s enough to cover the uninsured and still have some left over for other public-health needs.
If healthcare costs continue to rise at their current rates, it will cost $24,000/yr to insure a family of four by 2016, an 84% increase from today. At these rates, half of American households would have to spend at least 45% percent of their income to be insured.
In the Nation, Willa Thompson describes how a bicycle crash made her appreciate the connection between healthcare and politics. Thompson was 21 years old when she suffered major injuries after a collision with a truck. Luckily, she was covered by her parents’ medical insurance until she turned 22. She later realized that if she had been just a few months older when the accident happened, she wouldn’t have been able to pay for her medical care.
We all agree that something needs to be done. Let’s briefly review the options that have been proposed so far. Obama wants to provide healthcare for all by requiring private insurance companies to cover everyone and creating a public health insurance plan to compete with private insurers. The second part of his plan is the public option that Republican opponents are so scared of.
Insurance companies love the idea that we’ll all be forced to buy their expensive product. They’re not so keen about competition from the public sector.
Ezra Klein writes, “If you’re looking for the coming fault line on the left of health care politics, keep an eye on what happens to the public insurance option in the health reform bill.” Will the public plan survive? Not if the Republicans and the insurance lobby have anything to say about it. As evidence, Ezra cites this passage from a recent article in Congressional Quarterly:
Mark Hayes, a Republican health policy adviser to the Senate Finance Committee, said Republicans have concerns because the government plan might have access to price controls and other tools not available to private insurers. This could lead to lower premiums in the government plan, which would cause most consumers to migrate out of the private market, he said.
“Over time the effect the government option could have [is an] erosion in the private market, [making] other choices not available,” Hayes said.
The consensus among progressives is clear, the public plan must prevail. In fact, many advocate going all the way to single-payer health insurance. Rose Ann DeMoro, executive director California Nurses Association/National Nurses Organizing Committee argues in the Progressive that Obama and Daschle should opt for single payer health insurance. Now is no time for piecemeal solutions:
Such a path would perpetuate the crisis and deal a cruel blow to the hopes of Americans for real reform. Those in Congress and liberal policy organizations who are embracing caution or promoting more insurance, not more care, are playing a risky game. It could jeopardize the health security of tens of millions of Americans and, in the process, fatally erode public support for the Obama administration.
Ezra links to a candid post from the blog of the right wing Cato Institute wherein Michael F. Cannon argues that blocking Obama’s health plan is the key to GOP survival. Why? Because, history shows that once people start getting good healthcare from the government at a price they can afford, they want to keep reelecting the politicians who make that possible. Cannon calls the phenomenon where people reelect governments that give them good healthcare “becoming dependent on the government,” we call it “voting our self-interest.”
In other healthcare news, public health advocates are not pleased about rumors that Obama may ask Mark Dybul to stay on as US Global AIDS Coordinator for the first year of Obama’s term. Dybul is responsible for implementing the President’s Emergency Plan for AIDS Relief, which funds AIDS prevention and treatment in 15 poor countries. Advocates say that Dybul, a medical doctor, is too focused on medical interventions and behavioral changes for individuals, and not sufficiently concerned with broader public health initiatives.
Weekly Audit: A Year of Bad Decisions
As Congress finally winds down what House Financial Services Committee Chairman Barney Frank, D-Mass., refers to as “the session that will not die,” most of us have already contracted cases of outrage exhaustion from the barrage of Wall Street-related absurdities that the government has embroiled itself in over the past year.
But do not despair! David Sirota penned two pieces this week vindicating progressive critics of the current regime, one for Salon.com and another for the Campaign for America’s Future, detailing how recent reports from government agencies themselves have revealed the administration’s utter failure to craft a responsible financial rescue package. With the incompetence obvious to everyone, Sirota hopes that, “Maybe, just maybe, our humiliated rulers will start listening,” noting that progressives were right all along about meaningless CEO pay limits and oversight mechanisms in the $700 billion bailout, and overblown rhetoric from Treasury Secretary Henry Paulson.
The oratorical frenzy surrounding too-big-to-fail Wall Street titans and last-ditch government bailouts has also made it easy to forget that the financial sector actually does desperately need some downsizing, as Joshua Holland reports for AlterNet.
Not only is the financial sector burdened with mountains of worthless debt instruments, it has created broader economic inefficiencies over the past decade by gobbling up a disproportionate share of the total economy. Holland presents a host of frightening statistics about the conditions leading up to the current recession, noting an 11% surge in poverty between 2000 and 2007, lower median household incomes and sluggish job growth. Almost everybody except the financiers, it seems, was hurting, and the global economy will not recover from its economic slide until the financial sector owns up to the losses inherent in its chimerical expansion.
But financial policy failures have not been limited to bad rulemaking and pro-Wall Street philosophy. Even basic anti-fraud protections that have been on the books since the 1930s are not being enforced effectively, as evidenced by the massive fraud scheme allegedly perpetrated by fund manager Bernard Madoff. The Securities and Exchange Commission received several warnings about Madoff’s business practices dating back to at least 1999, according to The Wall Street Journal, but chose to ignore them until Madoff’s system finally collapsed on itself this fall. As Truthdig’s Ear to the Ground Blog points out, fallout from the scandal is so broad that many of those hit by the scheme “might not know yet that they’re broke.”
Over at The Nation, Nicholas von Hoffman notes how the risky investment practices that have led investment bankers to the public coffers this year have also dealt a massive blow to funding for U.S. colleges and universities. Harvard University has officially lost $8 billion of its endowment since June, while the University of Virginia—whose president, John Casteen, serves on the board of directors at the collapsed banking giant Wachovia—has hemorrhaged $1 billion. Students obviously did not demand that these funds be spent recklessly, but students will ultimately pay the price.
Of course, there’s another bailout going on, unless Senate Republicans have their way. The faltering Detroit automobile industry is seeking about $14 billion in government funds, or slightly less than 10% of what taxpayers have already poured into insurance icon AIG, which employs few blue-collar workers and mostly produces useless debt insurance for even more useless debt circulating through Wall Street.
Sen. Bob Corker, R-Tenn., led a Republican attack on auto unions, refusing to back a Detroit rescue package last week unless union laborers take a major pay cut. But the assault on the working class seems a little misguided, given the willingness of Congress to hurl $700 billion at U.S. banks without any strings on executive compensation.
“Citigroup’s CEO is being paid $216 million this year, yet Corker made no demand that he take a whack in pay,” Jim Hightower writes, even though Citi alone has accepted bailout funds worth over three times what the entire auto bailout would cost.
The chief difference between Detroit’s labor costs and those of its Japan-headquartered competitors is several decades of built-up pension plans. But as Hilzoy writes in a post for The Washington Monthly that the package was already so acquiescent to Republican demands that no serious conservative negotiators would have demanded further concessions.
Republicans do not have a monopoly on economic insanity. Over at The American Prospect, Ezra Klein highlights a troubling quote from Larry Summers, who will be the head economic advisor in Barack Obama’s White House next year. The passage appears in the new book Creative Capitalism, edited by lefty journalist Michael Kinsley:
“As for [Milton] Friedman — I’m not so sure he looks bad,” Summers says. “What is most screwed up today? GSEs, Citibank, regional banks. What is most regulated? Same list. What is least screwed up? Hedge funds and the like. What is least regulated?”
Summers’ “most screwed up” list only holds up if you exclude unregulated firms who were so completely decimated over the past year that they have become extinct. There are no major independent Wall Street investment banks anymore. Lehman Brothers died, Bear Stearns and Merrill Lynch sold to major commercial banks in emergency mergers and both Goldman Sachs and Morgan Stanley converted to commercial banks to avoid collapse. No regulator has oversight of the entire investment banking corporate structure, and the mega i-banks have simply disappeared.
Same goes for the private subprime mortgage firms like Ameriquest and NovaStar. Wondering why those logos disappeared from NASCAR hoods about a year ago? Those subprime lenders were completely unregulated and they all went bankrupt.
Sadly, the economy is well past the point where government action could fend off a severe recession. At this point, it’s all damage control. The downturn is already hitting demand so hard that even recycling programs are on the ropes, as Air America Media’s Ron Kuby discusses in a radio interview with recycling organizer Meghan McCutcheon. Cash-strapped producers are well aware of consumer pocketbook pressures, and are bunkering down to ride out the recession with as few costs as possible—including cuts in raw materials, recycled or otherwise.
This post features links to the best independent, progressive reporting about the economy. Visit Economy.NewsLadder.net for a complete list of articles on immigration, 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: Chicago workers strike back, jobs strike out, Obama strikes new New Deal
President-elect Barack Obama rolled out his highly anticipated priorities for an economic recovery package this weekend, but the current Congress remains focused on bailouts, with the fate of U.S. automobile manufacturers still hanging in the balance.
Mike Madden details the Detroit drama for Salon.com, reporting on how lawmakers who would ordinarily be receptive to a salvage plan have become skeptical in the wake of the Bush administration’s handling of the Wall Street bailout. After being promised that their votes would be used to help fend off foreclosures, members of Congress have responded with outrage as Treasury Secretary Henry Paulson has devoted all of his legislatively allocated funds to the purchase of preferred stock in financial companies.
Josh Marshall offers a compelling analysis of the public reaction to the Big Three’s predicament over at Talking Points Memo, noting that the widespread reluctance to reward bad behavior at the automakers could be tied to the fact that most people actually grasp how car companies work, whereas the average American has no idea what role Citigroup really plays in the economy.
“I do think a big, not very good, and really underappreciated reason for the disjuncture is that the auto makers are structured in a way, are economic entities in a way, that most of us can have some basic understanding on how they operate, what they do,” Marshall writes.
While the Big Three have undeniably been horribly mismanaged for decades, losing even one of them would have major economic aftershocks. General Motors alone employs well over one million workers.
The role of unions in the collapse of the Big Three has also been blown completely out of proportion. Not only have major newspapers grossly overstated union wages for Detroit by factoring in decades of built-up pension costs as labor expenses for current employees, they have recently featured editorials claiming that unions exercise too much power in the current economy. Ezra Klein of The American Prospect takes the Washington Post’s Sebastian Mallaby to task for simultaneously bashing unions and praising economic growth in countries like Sweden and Denmark, which both have union densities of about 80%, compared to 12% in the U.S.
Which is why it is nice to hear that union workers at the Republic Windows and Doors factory in Chicago– who received just three days’ notice that the plant would be shut down– have refused to leave the facility until they are granted severance pay. Check out Ron Ruby’s interview with factory worker Raul Flores live from the sit-in for Air America Radio.
Obama’s new New Deal also gives progressives something to celebrate after several recent centrist selections for cabinet positions. We finally have an economic policy that does not begin and end with the financial sector.
The next president’s proposals include a massive push to boost the energy efficiency of government buildings, repair public schools and provide them with new teaching technologies, and invest in new health care technologies. The plan also includes some of the most basic infrastructure layouts, with a 21st century twist: Obama pledged to rebuild roads and bridges across the country and expand the availability of broadband interenet access.
John Nichols writes for The Nation that Obama’s focus on infrastructure will be particularly helpful for construction workers, who have been hit hard by the recent housing market downturn.
But while the recovery package would be a step in the right direction (the term “recovery” appears to be roughly synonymous with the word “stimulus,” with added hints of AIG, Lehman Brothers and skyrocketing unemployment numbers), it is far from the final word on the nation’s economic troubles. For Obama to carry out his campaign promise to make health insurance available to everyone in the U.S. would not only be good for the nation’s physical well-being, it would also cushion the shock stemming from mounting job losses, as Sarah van Gelder notes for YES! Magazine. An extension of unemployment benefits would also help laid-off workers pay the bills while they search for new work.
Speaking of job cuts, the Labor Department delivered another devastating set of unemployment data last Friday, revealing that the U.S. economy lost 533,000 jobs in the month of November, the largest monthly decline in 34 years.
Carlo Basilone produced nice video spot for The Real News detailing the scope of current U.S. economic difficulties. Although 10.3 million people are now unemployed nationwide, a staggering 10% are living on food stamps, revealing that many of those who still have jobs are not being paid enough to make ends meet.
As Farron Cousins notes in a piece for GoLeft TV, monthly job losses could reach over one million next year and remain at that level for several months.
On the Wall Street front, David Moberg provides an excellent history of recent financial innovation and subsequent financial collapse in a piece for In These Times. Chelsea Green features Woody Tasch’s inquiries into alternative financial structures that are actually tied to communities and the environment rather than unsustainable risk and short-term executive compensation models.
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. And for the best progressive reporting on critical immigration and healthcare issues, check out Immigration.NewsLadder.net and Healthcare.NewsLadder.net.
This is a project of The Media Consortium, a network of 50 leading independent media outlets, and created by NewsLadder.
Weekly Audit: It’s a recession, stupid (and what that means)
The gurus at the National Bureau of Economic Research have finally acknowledged the obvious: the U.S. economy is in a recession, and has been since December 2007. With Wall Street still on life support and unemployment statistics reaching levels unseen since the heyday of Ronald Reagan, the news was far from shocking, as Truthdig’s Ear to the Ground notes, but still enough to help push the Dow Jones Industrial Average down nearly 700 points on Monday.
More frightening than the belated use of the r-word– Kevin Drum of Mother Jones called the December start-date all the way back in February in a piece for the Washington Monthly– is the fact that drastic government action to right the nation’s faltering economic ship does not appear to be working. The current crisis has delivered a blow not just to investors and homeowners, but to the work of economist Milton Friedman, a thinker granted almost sacred status in conservative circles. Over at Salon.com, Andrew Leonard highlights a New York Times column by economist Paul Krugman on how Friedman’s monetarist economic theory has taken a hit over the past year. Friedman’s doctrine calls for restricting government relief in times of economic strain to the arena of monetary policy—that is, central banks should increase the supply of money in the economy, but governments should not directly undertake spending initiatives to boost demand.
But while the Federal Reserve has pumped liquidity into the financial sector at every conceivable opportunity over the past year, but the crisis has continued to grind on, spreading from one troubled sector to another. We are clearly out of options that match up with Friedman’s monetarism, indicating that public policy has nowhere left to turn except direct government spending on economic support, as Ezra Klein argues for The American Prospect.
President-elect Barack Obama has vowed to deliver a major fiscal stimulus package as soon as possible after taking up his new job on January 20. Joshua Holland notes for AlterNet that Obama does not have to radically overhaul the economy to implement short-term stimulus that will have long-term economic benefits. Rebuilding our infrastructure with sustainable designs and materials and revitalizing our outdated health care system would both create jobs quickly and prevent other problems looming down the road.
The past week, of course, included the Thanksgiving holiday, and no coverage of the U.S. economy for the period would be complete without a discussion of Black Friday. It appears that the retail sector is about to follow Wall Street and the auto industry into disaster over the next month, as consumer confidence remains at dismally low levels. In a report for The Colorado Independent, Mary Kane explains how the massive loss of housing wealth over the past two years and decades of expensive consumer debt have made people much less eager to pull out the plastic for holiday gifts.
But while one industry after another steadily succumbs to economic reality, some of the people hardest hit by the downturn are not involved in any industry at all. With retirement savings devastated by the financial earthquake, many elderly retired people are now going back to work just to make ends meet, as Leslie Casimir details in a harrowing report for New America Media.
One of the most striking public policy disparities over the past year has been the rabid push from global governments to salvage financial institutions without devoting any serious attention to ordinary people, particularly the poor. The Bush administration has repeatedly argued that allowing major firms to fail would cause significant harm to vulnerable individuals well outside the financial system, but has done almost nothing to directly address the concerns of those people, who do not simply stop being poor once Citigroup gets its groove back. Oneworld.net notes an analysis from the Institute for Policy Studies that reveals the U.S. and Europe have dedicated $4.1 trillion to rescue the financial industry—roughly 40 times what they have spent to fight climate and poverty in the developing world.
The incongruity is reflected not only in the sheer size of the bailout packages compared to the poverty programs, but in the speed of implementation. Literally hundreds of millions of people have been unable to afford to eat for literally decades, but when Bear Stearns hits a liquidity logjam, a solution is in place by the end of the weekend.
Part of this is probably due to the U.S. psychological obsession with both Wall Street and homeownership. Writing for The Nation, Max Fraser discusses the development of pervasive and fundamentally irrational beliefs among bankers and borrowers alike over the past decade, beliefs that have ultimately eroded access to affordable housing despite an explosion in lending between 2004 and 2007. The current crisis proves that we cannot rely on private-sector initiatives or pseudo-public entities like Fannie Mae and Freddie Mac to responsibly expand access to homeownership.
Until the government steps in with a meaningful commitment to affordable housing, check out the tips Jane Goetze offers at High Country News on how to survive by living out of your car.
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. And for the best progressive reporting on critical immigration and healthcare issues, check out Immigration.NewsLadder.net and Healthcare.NewsLadder.net.
This is a project of The Media Consortium, a network of 50 leading independent media outlets, and created by NewsLadder.
Healthcare: Out with the Old, In with the New
Because if it bleeds, it leads… Sarah van Schagen rates the environmental impact of feminine hygiene products for Grist.
In all seriousness, this has been a very exciting week in healthcare news. The Bush administration is racing to take away as many reproductive rights as it can before leaving office. The Democrats in Congress are taking the lead on healthcare reform by writing up their own proposal before president Obama takes the Oath of Office.
Last week, Sen. Max Baucus unveiled a detailed proposal to provide health insurance for all Americans. Brian Cook has a roundup of reactions.
Note that the Baucus plan is by no means a call for radical change. The blueprint proposes to fix the healthcare system with the same piecemeal strategies that get trotted out every time Americans talk about healthcare reform. The stated goal is to enable more people to buy “affordable” private health insurance while expanding Medicare and Medicaid for the poor and the elderly.
Why such timidity? As Josh Marshall argues at TPM, Obama’s election is a mandate for fundamental structural change in the healthcare system.
The fact is, majority of Americans support single-payer health insurance, even if they’d have to pay higher taxes. Daina Saib reports in YES! that even Republicans are getting on board. Saib introduces us to an unlikely champion of single-payer, Dr. Rocky White, conservative Christian and former Republican who started advocating for single payer when the system made his own practice unmanageable.
As we talk about the dire state of the Big Three automakers, remember that the Canadian auto industry stays competitive because the government takes care of health care, unlike in the ‘States where automakers and unions are struggling to pay for it.
Ezra Klein gives us a crash course two strategic approaches to healthcare reform. He explains that there are two basic schools of thought: delivery system reform and financing reform. Delivery reformers hope to make the system work better by bringing down costs and delivering better value for money. Financing reformers focus on how we’re going to pay for it all. The Baucus blueprint is financing reform. Repealing Medicare Plan D would be delivery reform.
These two approaches are complimentary. Ezra writes: “[T]he two agendas fit neatly in a comprehensive reform package. Coverage expansion isn’t sustainable unless cost growth is slowed. Cost growth can’t be slowed without delivery system reform.” He notes that The Center for American Progress has a new, free, book on healthcare reform, available for download, here.
The Bush administration is weighing an eleventh hour rules change that could prevent women on Medicaid from receiving birth control and deny rape victims emergency contraception and push the country one step closer to theocracy.
The proposed rule would prevent any entity that receives federal funds (e.g., hospitals, universities, etc.) to require employees to “assist in the performance of any part of a health service program or research activity” financed by the Department of Health and Human Services” or participate in abortions or sterilizations if these activities offend their religious or moral convictions.
President-elect Obama has already spoken out against the proposed rules change.
Jonathan Stein of Mother Jones notes that civil rights law already protects employees from discrimination on the basis of religion. In fact, the Equal Employment Opportunity Commission (EEOC), the agency that enforces the federal employment discrimination law, is strenuously objecting to the new rules because they would create an absolute right to religious accommodation, as opposed to the balance between employer and employee that exists under current law.
With Sarah Palin back in Wasilla, we thought we’d heard the last about victims paying for their own rape kits. Not so fast. While the Violence Against Women Act forbids victim-pay rape kits for civilians, women in the armed services may not enjoy the same protections.
Penny Coleman, writing in AlterNet, explains: “TRICARE, the United States Department of Defense Military Health System that covers active duty members, will only pay for rape kits if the victim is seen in a military or a VA facility.” However, service women are being seen in a non-VA facility in the USA, they shouldn’t be paying for their rape kits, thanks to VAWA. This shouldn’t be happening.
Another sobering statistic: The US military loses the equivalent of a brigade of veterans to suicide each year–yet more evidence that mental health parity should be a priority in health care reform.
Finally, Stephanie Losee interviews Valerie Frankel, the author of Thin is the New Happy, a memoir about coming to terms with weight and body image in an appearance-obsessed society.
This post features links to the best independent, progressive reporting about health care. Visit Healthcare.NewsLadder.net for a complete list of articles on healthcare affordability, healthcare laws, and healthcare controversy. And for the best progressive reporting on the ECONOMY, and IMMIGRATION, check out, Immigration.NewsLadder.net and Economy.NewsLadder.net.
This is a project of The Media Consortium, a network of 50 leading independent media outlets, and created by NewsLadder.
Electing the New Economy
Welcome to the Media Consortium’s Economy MediaWire project! Check this space every Tuesday for a discussion of the best economic coverage available on the information superhighway.
This Tuesday, of course, is no ordinary Tuesday, but the day of the most important U.S. election in generations. Poll after poll has shown the economy to be the top concern for voters this year, as an epic financial crisis and the bursting of the housing bubble have ensured that the next president will have his hands full come January.
But while there is plenty of bad news to go around of late, Ezra Klein notes for the American Prospect that economic downturns can be extraordinary opportunities to overhaul national infrastructure, as the government steps in to fund projects that support what the private sector can no longer afford.
“Right now, there’s something damn close to political consensus for a transformational investment package,” Klein writes, arguing that, “the next president should be thinking hard indeed about how to make the most of the opportunity.”
During Congressional hearings over the last two weeks, two influential economists have urged the government to embark on major infrastructure projects as a means to stimulate the economy. Both Nobel Prize-winner Joseph Stiglitz and NYU Professor Nouriel Roubini, who accurately predicted nearly every development in the recent Wall Street implosion, argued that the best way to ease economic malaise is to pour money into green energy projects. Preventing a recession appears out of the question, but why not set our sights on something “transformational,” in Klein’s words, that could fend off ecological destruction even more comprehensive than the recent financial hemorrhaging?
David Morris emphasizes the potential for environmentally friendly infrastructure development for Alternet, suggesting that a President Barack Obama may “institute a massive public works program focusing on infrastructure that lends itself to a green orientation.”
Morris notes several frightening parallels between today’s green energy movement and that of the early 1980s, when environmentalist momentum from the Carter administration collapsed under the weight of the most wrenching recession since the Great Depression. We have witnessed a similar drop-off in green interest this fall, according to Morris, as the financial crisis has deepened and gas prices have declined dramatically. But renewable energy industries are a much stronger political force today than they were in the early Reagan years, and Morris believes the sheer efficiency of green projects will give the next president more bang for his outlay bucks than other programs. Environmentally conscious investments can sharply reduce operating costs, while creating armies of new jobs.
Writing for The Nation, James S. Henry and Jim Manzi claim that it is time not only for the government to boost research and development, but to “nurture a national culture that reminds young people of their country’s innovation heritage and encourages them to become engineers, designers and scientists, rather than just lawyers, accountants and bankers.”
Beyond infrastructure, The Progressive’s Matthew Rothschild discusses research from Mark Zandi of Moody’sEconomy.com, which reveals that many traditional lefty priorities are also among the most efficient methods for stimulating economic growth. Expanding food stamps programs and unemployment benefits puts money in the hands of people who will actually spend it, instead of making long-term investments that keep the funds out of the general economy, Rothschild writes. Priorities touted by conservatives this election cycle, like slashing the capital gains tax and lowering income tax rates for the wealthiest corporations, are much less effective.
Speaking of throwing money at big corporations, the Treasury Department is currently funneling hundreds of billions of dollars to banks in an effort to boost lending so other firms can borrow money buy supplies, pay workers and fund research. It’s not a terrible concept, except, as Robert Kuttner notes back at the Prospect, Treasury Secretary Henry Paulson isn’t actually requiring banks to lend the money out, and the banks would rather use the cash to finance acquisitions and pay dividends.
This is, of course, an outrage, but it is far from inevitable. Kuttner cites Franklin Delano Roosevelt’s “yardstick competition” programs, where a public entity would compete with the private sector and provide products oriented toward the general social good, creating incentives for industries to offer better products.
Under Roosevelt, the government invented the long-term fixed-rate mortgage, which was so effective that it quickly came to dominate the private marketplace. Taxpayers would get better results from their present bailout burden if the government would actually takeover one institution outright and have it make new loans without wasting money on dividends, Kuttner argues. Other banks would have to boost their own lending activities in order to keep from losing market share to the government, and billions of taxpayer dollars wouldn’t be squandered.
Jim Hightower has an excellent breakdown of the five greatest villains of the current financial crisis here.
With President George W. Bush set to host an economic summit with international leaders on the financial meltdown this month, OneWorld.net carries an excellent story by Jim Lobe on a call from almost 600 non-governmental organizations for fundamental economic reforms aimed at protecting the most vulnerable members of the global economy. Bush is widely expected to oppose reforms to the International Monetary Fund and the World Bank, which many NGOs claim have imposed policies that have benefited Western companies at the expense of the international poor.
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