“In The GOP, Every Day Is A Bank Holiday”: The Republican College Loan Plan Would Help Banks, Hurt Families
Big banks are doing better than ever. Sunday, New York Times financial columnist Gretchen Morgenson wrote that 2013 has been a very good year for the financial industry. The KWB Bank Index which tracks the stock prices of 24 leading banks has risen 30 percent this year and it’s at its highest level since 2008.
With the banks doing so well, why are House Republicans pushing so hard to make banks even more money on the backs of kids from working families who want to attend college? The answer is that every day in the Republican Party is a bank holiday.
House Republicans took a step last week to boost the fortunes of their banker backers even higher. The GOP House majority proposed changes for the college student loan program which is scheduled to expire July 1. The Republicans would allow the interest on student loans to double. This will mean even higher profits for the GOP’s banker backers. But it will end the hopes and dreams that thousands of young Americans and their families have for their future in the cut throat world economic competition.
President Obama made his case to stop the interest rate increases in a speech last Friday. The president supports a Senate Democratic plan that would freeze interest rates for 79 million students at 3.4 percent for 2 years. Congressional Republicans want to tie the interest rate to the cost of a 10 year Treasury note. The nonpartisan Congressional Budget Office estimates the House Republican plan would push interest rates to 5.0 percent next year and to 7.7 percent by 2018.
If Republicans get their way, increased interest rates for 79 million college students will mean a big payday for the financial industry next year and a another step down for middle income families. Millions of college grads are already up to their armpits in debt. The Republican plan would make it even harder for young college graduates to get up from under the crushing debt that they already face.
Chinese president Xi Jinping will be in the U.S. this week. His visit should focus the United States on what it needs to do to compete economically with the emerging industrial tiger.
The United States has fallen to 10th in the world in the percentage of people with a college degree. That may be why it’s much easier for people to advance economically in Western Europe than it is in the U.S. The Republican plan will push us down even further on the education ladder and give our economic competitors in the world a leg up. If we want to compete effectively internationally, we should do everything we can to get more young people into college instead of making it more difficult for them to attend college. College is the ticket young Americans need to punch to get the training they need to compete with China and other engines of international economic growth.
The U.S. should build on its strengths. We still have the best higher education system in the world. Hundreds of thousands of international students are currently enrolled in American colleges and universities to get the best college education in the world. We would be a lot better off if American students could afford to attend them too.
The GOP plan to boost banks at the expense of kids in working families mirrors the trends in the American economy at large. The Dow Jones Index, which measures the fortunes of corporate America on Wall Street, has hit record highs several times this year. While profits for corporate America have mushroomed, real income for middle class families has been stagnant. The Republican student loan program will accelerate an unfortunate trend that has enriched Wall St. and improvised middle class families who are working overtime just to meet ends meet.
By: Brad Bannon, U. S. News and World Report, June 4, 2013
“The Use And Abuse Of Freedom”: The Elements Of Words That Explain The Mess We’re In
Last week David Brooks had an interesting column about a couple of studies that surveyed key words in a body of writings. (No, we’re not talking about tax examiners looking for Tea Party among applications.) He describes the “two elements” that he found:
“The first element in this story is rising individualism. A study by Jean M. Twenge, W. Keith Campbell and Brittany Gentile found that between 1960 and 2008 individualistic words and phrases increasingly overshadowed communal words and phrases. That is to say, over those 48 years, words and phrases like “personalized,” “self,” “standout,” “unique,” “I come first” and “I can do it myself” were used more frequently. Communal words and phrases like “community,” “collective,” “tribe,” “share,” “united,” “band together” and “common good” receded.
“The second element of the story is demoralization. A study by Pelin Kesebir and Selin Kesebir found that general moral terms like “virtue,” “decency” and “conscience” were used less frequently over the course of the 20th century. Words associated with moral excellence, like “honesty,” “patience” and “compassion” were used much less frequently. The Kesebirs identified 50 words associated with moral virtue and found that 74 percent were used less frequently as the century progressed. Certain types of virtues were especially hard hit. Usage of courage words like “bravery” and “fortitude” fell by 66 percent. Usage of gratitude words like “thankfulness” and “appreciation” dropped by 49 percent. ”
The question I have–and would have tried to answer, had not my attempts to find these studies through google led me to data bases that thwarted my efforts to access the pieces–is this: how did the word `freedom’ do?
One of the biggest changes in my adult life is what has happened to freedom, not just as a word, but as a value. It is, it seems to me, the only value Americans put much stock in. Equality, in which immigrants and labor unions invested so much energy and support and devotion during the first part of the 20th century, now seems a hostage of identity group politics. Freedom is it–it’s what we appeal to for everything, from gay marriage to Wall Street shortcuts to environmental pollution to smoking pot to war (Free Kuwait! Iraqi freedom!) These are the years of freedom triumphant, and boy, if anything explains the mess we’re in, it’s freedom. Try arguing for something in terms of Community, or Sacrifice. Go to Congress and make a case for Majority Rule, and you’ll get an earful from Ted Cruz and Rand Paul about the freedom of the minority to thwart the majority.
More than anyone, Ronald Reagan put us on this path. I can’t imagine a figure who would be able to get us to rebalance our values.
By: Jamie Malanowski, Washington Monthly Political Animal, May 26, 2013
“Worsening Jobs Crisis”: America’s Middle Class Is Burning To The Ground, While Washington Fiddles With Scandal Nonsense
At last, some excellent economic news for folks long-mired in the stagnant labor market!
At least, those were the headlines recently trumpeted across the country. “Jobs Spring Back,” exclaimed a typical headline or report that companies added a better than expected 165,000 private-sector jobs in April. Wow — the thunderous, three-year boom of prosperity that has rained riches on Wall Street is finally beginning to shower on our streets, right?
Well, as dry-land farmers can tell you, thunder ain’t rain. Read beneath the joyful headlines hailing April’s uptick in job numbers, and you’ll see the parched truth.
For example, more than a third of working-age Americans are either out of work or have given up on finding a job. Also, last month’s hiring increase was almost entirely for receptionists, waiters, clerks, temp workers, car-rental agents and other low-wage positions with no benefits or upwardly mobile possibilities. On the other hand, manufacturing — generally the source of good, middle-class jobs — did not add workers in April and has cut some 10,000 jobs in the last year.
Especially problematic was the continued rise in underemployment — people wanting full-time work, but having to take part-time and temporary jobs. Underemployment is also pounding college graduates. While they’ve been more successful than non-grads at landing jobs, they’re not getting jobs that fit their career goals or even require the degrees they spent money and time to obtain. Indeed, many of those rental agents and restaurant employees you encounter hold four-year degrees, forcing everyone else to scramble for the few, even lower-paid jobs further down the skill ladder.
Meanwhile, the next graduating class is already beginning to flood into the labor market from colleges and high schools with nowhere to go.
In May, another headline shouted: “Stock Market Soars.” It expressed delight that the Dow Jones Average topped 15,000 for the first time in its history.
Yet this index of Wall Street wealth gives a totally false picture of our nation’s true economic health. Yes, the privileged few are doing extremely well. But the workaday many are struggling — and falling further and further behind as the jobs market sinks steadily from mere recession down into depression.
The monthly unemployment reports don’t tell the depths of misery that’s out here in the real world, beyond the view of Wall Street and Washington elites. For example, President Obama hailed the news that unemployment dipped to 7.5 percent in April. Unstated, though, was the stark reality that this good-news dip was not due to a jump in job offerings, but to a bad-news labor market so weak and discouraging that more and more Americans are dropping out of it or never entering it.
More than a third of our working-age population is no longer even in the job market, and only 58.6 percent of us are employed. Put the opposite way, 41 percent of the potential workforce is not working — about 102 million people. One more statistic, and it’s a chiller: More than one out of five American families report that, last year, not a single family member had a job.
Our people are trapped in a jobs crisis that is sucking the economic vitality out of our nation, but our leaders refuse even to acknowledge it, much less cope with it. In fact, corporate chieftains are deliberately exacerbating the crisis by hoarding trillions of dollars that ought to be rushed into job-creating expansions, and politicians keep adding to the casualties by gleefully eliminating the middle-class jobs of hundreds of thousands of teachers, firefighters, police and other valuable public employees.
America’s middle class is burning to the ground, while Washington fiddles with nonsense and Wall Street feathers its own nest. It’s disgraceful.
By: Jim Hightower, The National Memo, May 15, 2013
“The Hollowing Out Of Government”: The Real Reason Why The Government “Isn’t Doing Its Job”
The West, Texas chemical and fertilizer plant where at least 15 were killed and more than 200 injured a few weeks ago hadn’t been fully inspected by the Occupational Safety and Health Administration since 1985. (A partial inspection in 2011 had resulted in $5,250 in fines.)
OSHA and its state partners have a total of 2,200 inspectors charged with ensuring the safety of over more than 8 million workplaces employing 130 million workers. That comes to about one inspector for every 59,000 American workers.
There’s no way it can do its job with so few resources, but OSHA has been systematically hollowed out for years under Republican administrations and congresses that have despised the agency since its inception.
In effect, much of our nation’s worker safety laws and rules have been quietly repealed because there aren’t enough inspectors to enforce them.
That’s been the Republican strategy in general: When they can’t directly repeal laws they don’t like, they repeal them indirectly by hollowing them out — denying funds to fully implement them, and reducing funds to enforce them.
Consider taxes. Republicans have been unable to round up enough votes to cut taxes on big corporations and the wealthy as much as they’d like, so what do they do? They’re hollowing out the IRS. As they cut its enforcement budget – presto! — tax collections decline.
Despite an increasing number of billionaires and multi-millionaires using every tax dodge imaginable – laundering their money through phantom corporations and tax havens (Remember Mitt’s tax returns?) — the IRS’s budget has been cut by 17 percent since 2002, adjusted for inflation.
To manage the $594.5 million in additional cuts required by the sequester, the agency has announced it will furlough each of its more than 89,000 employees for at least five days this year.
This budget stinginess doesn’t save the government money. Quite the opposite. Less IRS enforcement means less revenue. It’s been estimated that every dollar invested in the IRS’s enforcement, modernization and management system, reduces the federal budget deficit by $200, and that furloughing 1,800 IRS “policemen” will cost the Treasury $4.5 billion in lost revenue.
But congressional Republicans aren’t interested in more revenue. Their goal is to cut taxes on big corporations and the wealthy.
Representative Charles Boustany, the Louisiana Republican who heads the House subcommittee overseeing the IRS, says the IRS sequester cuts should stay in force. He calls for an overhaul of the tax code instead.
In a similar manner, congressional Republicans and their patrons on Wall Street who opposed the Dodd-Frank financial reform law have been hollowing out the law by making sure agencies charged with implementing it don’t have the funds they need to do the job.
As a result, much of Dodd-Frank – including the so-called “Volcker Rule” restrictions on the kind of derivatives trading that got the Street into trouble in the first place – is still on the drawing boards.
Perhaps more than any other law, Republicans hate the Affordable Care Act (Obamacare). Yet despite holding more than 33 votes to repeal it, they still haven’t succeeded.
So what do they do? Try to hollow it out. Congressional Republicans have repeatedly denied funding requests to implement Obamacare, leaving Health and Human Services (the agency charged with designing the rules under the Act and enforcing them) so shorthanded it has to delay much of it.
Even before the sequester, the agency was running on the same budget it had before Obamacare was enacted. Now it’s lost billions more.
A new insurance marketplace specifically for small business, for example, was supposed to be up and running in January. But officials now say it won’t be available until 2015 in the 33 states where the federal government will be running insurance markets known as exchanges.
This is a potentially large blow to Obamacare’s political support. A major selling point for the legislation had been providing affordable health insurance to small businesses and their employees.
Yes, and eroding political support is exactly what congressional Republicans want. They fear that Obamacare, once fully implemented, will be too popular to dismantle. So they’re out to delay it as long as possible while keeping up a drumbeat about its flaws.
Repealing laws by hollowing them out — failing to fund their enforcement or implementation — works because the public doesn’t know it’s happening. Enactment of a law attracts attention; de-funding it doesn’t.
The strategy also seems to bolster the Republican view that government is incompetent. If government can’t do what it’s supposed to do – keep workplaces safe, ensure that the rich pay taxes they owe, protect small investors, implement Obamacare – why give it any additional responsibility?
The public doesn’t know the real reason why the government isn’t doing its job is it’s being hollowed out.
By: Robert Reich, The Robert Reich Blog, May 4, 2013
“Watchdog Or Lapdog”: Big Corporations And Wall Street Still Hiding CEO Pay Ratios
Corporations are obligated to disclose how much their CEOs earn compared to the average worker, thanks to Section 953(b) of the financial reforms of 2010 known as Dodd-Frank.
However, three years after that bill became law, some of the nation’s largest corporations are battling regulators to prevent such disclosure, according to Bloomberg.
“The fact that corporate executives wouldn’t want to display the number speaks volumes,” said Phil Angelides, who was the chairman of the Financial Crisis Inquiry Commission, which investigated the collapse that led to the Great Recession.
Angelides says that the attempt to block this provision is just one example of the “street-by-street, block-by-block fight” that corporations and Wall Street are waging against implementation of the modest reform package that passed only after it was weakened to garner Republican support in the Senate.
Groups including the American Insurance Association, Business Roundtable, National Investor Relations Institute, and the U.S. Chamber of Commerce have petitioned the Security and Exchange Commission (SEC), making the argument that “it is unclear how the pay ratio disclosure will be material for the reasonable investor when making investment decisions.” They claim that calculating such ratios is time consuming and almost impossible for multinational corporations.
Without obligated disclosure, there’s no clear way to assess CEO-to-worker ratio. In 2010, the Bureau of Labor Statistics reported large-company CEO compensation was 319 times the median worker’s pay. Currently the average multiple of CEOs to a typical worker is 204 — up 20 percent since 2009, according to statistics collected from workers’ compensation estimates.
Bloomberg‘s Elliot Blair Smith and Phil Kuntz point to Ron Johnson, the recently ousted CEO of J.C. Penney, who earned a whopping 1,795 times what a typical $8.30-an-hour JCP salesperson took home.
The AFL-CIO has been attempting to counter the corporate lobbying with an effort to make the SEC put in place what is already law.
“The impact of high levels of CEO pay on employee morale is particularly important in today’s weak economy, when workers are being asked to do more for less,” suggests an online petition it is circulating to pass on to the government regulators.
“Estimates by academics and trade-union groups put the number at 20-to-1 in the 1950s, rising to 42-to-1 in 1980 and 120-to-1 by 2000,” Smith and Kuntz write.
Even if corporations are forced to disclose how much their top executive is paid, there are a variety of ways for them to cloak compensation.
Still the Campaign for America’s future calls enforcing Section 953(b) a crucial test for new SEC chair Mary Jo White to find out if she’ll be a “watchdog or a lap dog for Wall Street.”
By: Jason Sattler, The National Memo, May 2, 2013
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