Bernie/Biden Clash On Social Security Masks Real Differences

by Brian T. Lynch, MSW

In an opinion piece by Paul Krugman, published by the New York Times on January 21, 2020, Krugman writes, “The Sanders campaign has flat-out lied about things Biden said in 2018 about Social Security… The last thing we need is another president who demonizes and lies about anyone who disagrees with him, and can’t admit ever being wrong.”

That is pretty damning. What did Sanders or his team actually do?

Krugman writes that the Sanders campaign promoted a doctored video clip that distorted Biden’s record on Social Security. He repeated a quote from another N.Y Times article from January 18th (and updated Jan. 21st) by Katie Glueck’s that said:

“There is a little doctored video going around,” Mr. Biden said, adding that it was “put out by one of Bernie’s people.”

But Glueck also wrote:

“Former Vice President Joseph R. Biden Jr. on Saturday accused Senator Bernie Sanders’s presidential campaign of distorting his record on Social Security, claiming without evidence that Mr. Sanders’ team was promoting a “doctored” video…” [emphasis mine].

In fact, the video clip linked to Krugman’s article is an unedited segment of an interview from January 7th between Senator Sanders and Anderson Cooper. While listing differences between Biden and himself, Sanders said:

“You know, Biden has been on the floor of the Senate talking about the need to cut Social Security, or Medicare, or Medicaid.”

That’s it! Sanders didn’t say exactly what Biden said or when he said it. Krugman’s comments about a doctored video, therefore, appear to convict him of the same false accusation that he accuses Senator Sanders of committing.

But in fairness to the truth, the released Sanders’ campaign materials Krugman refers to did make some misleading claims. As pointed out in the PolitiFact article linked to the Krugman article, item #1 on the Sanders campaign document said:

“BIDEN’S BRAGGED OF TRYING TO CUT SOCIAL SECURITY & MEDICARE”

So, from where did this accusation come? It came from the Congressional Record of the U.S. Senate, as did another article on the subject in the Intercept written by Ryan Grim on January 13, 2020. The lead sentence of Grim’s article reads:

“AS EARLY AS 1984 and as recently as 2018, former Vice President Joe Biden called for cuts to Social Security in the name of saving the program and balancing the federal budget.”

Grim then cites this excerpt is from the Senate Congressional Record just fifteen-years ago:

“When I argued that we should freeze Federal spending, I meant Social Security as well. I meant Medicare and Medicaid. I meant veterans benefits. I meant every single solitary thing in the Government.”

In this case, it is Ryan Grim who distorted Biden’s record by taking it out of context. Biden was arguing that the budget sequestration under discussion should include all areas of the federal budget and not exclude the very popular and vital entitlement programs. In this same Congressional Record transcript, then-Senator Biden went on to say Social Security, “…is arguably the most important and most depended-upon program in the Federal Government.”

Joe Biden suggested taking Social Security off of the Federal Budget. He wanted to protect the billions of dollars in surpluses it generated each year back then, surpluses that Congress spent every year to cover deficits in other areas of the budget.

What this manufactured controversy misses, however, it the very significant point that the thrust of this and so many of Biden’s speeches always center on the middle-class. Biden has rarely ever focused on 45% of all Americans who live below middle-class economic standards. 

This is the real distinction.  Joe Biden is interested in maintaining stability in America by growing and sustaining the middle-class. Bernie Sanders, for his entire career, wants to bring hope and relieve the structural economic burdens of every American family living in or below the middle-class. It is this focus and message that is beginning to resonate in places around America where Biden's message just doesn't carry. It is this focus on economic inclusion for all segments of society that scares the heck out of the wealthy elites.

Here is one example of Biden's middle-class messaging. In his 2018 speech at the Brookings Institute, also cited in the same PolitiFact article to which Krugman linked his opinion, Biden said, “Folks, we’re here today for a simple reason: to talk about the middle class.” 

 He later goes on to describe the plight of a factory worker to make his point:

“Folks in the middle class are in trouble. It’s not just their perception. They are in trouble. Now it’s all about taking care of the folks at the top… take that guy working on the assembly line making 51 grand. We don’t talk about him anymore, by the way, if you notice politically. Not you, we in politics don’t. And his wife is a hostess at a nice restaurant, she’s making 28 [grand]. So they’re making almost 80 grand and they’ve got 2 or 3 kids, and they can’t make it if they live in Washington or New York or San Francisco.”

No one can seriously argue that the middle-class is in trouble in "high living" places like San Francisco and New York City, but how does this limited message resonate with half of all Americans in far-flung places who make way less than $80,000 per year. Wouldn't they love to have the financial problems of these middle-class families? What they get instead is a conspiracy of silence from politicians in both parties who are beholden to the donor class. These are many of the same families that responded to Donald Trump in the 2016 campaign. He spoke directly to them and they love him for that.

The real question before us now is which Democratic candidate for President has the message and credibility to take back that momentum?  Who has the spark to inspire the working poor to turn out and vote for the Democrat? It isn't the loyal base who needs to be motivated. They will "vote blue no matter who"(if we can believe that). It is the great mass of inactive voters we have been ignored for decades who will sweep Donald Trump and his Republican sycophants out of office if we offer them real change. 

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This reads as a companion article to one I wrote on the differences between Senator Elizabeth Warren, who I admire, and Senator Bernie Sanders, who I support at this time. In the Studebaker article I linked to that post the differences between Biden, Warren, and Sanders are discussed. That post and two important articles can be accessed here: 

https://aseyeseesit.blogspot.com/2019/08/differences-between-warren-and-sanders.html

The Economy and Society Benefit When Poor Families Have More to Spend

by Brian T. Lynch, MSW

Enhancing the human dignity of employment is an obvious, self-evident social benefit of raising minimum wages. It is both empowering and ennobling when breadwinners are able to provide for the needs of their family on their own, without government or extended family supports. This is reason enough to enact a living wage law. The minimum fair exchange for a full-weeks work ought to be a self-sufficient minimum wage. The burden for this minimum standard of living should rightly be on employers and not on the taxpayers who currently help support full-time low wage earners.

Corporations and business owners enjoy the benefits of government-subsidized labor and don’t want to give it up. Most of their arguments opposing higher wage standards rely on business-friendly economists whose academic theories and scholarly studies plum the detrimental impacts on businesses from higher labor costs. It is current practice to treat workers as a labor commodity separate from workers and their families as consumers and social beings with basic human needs. It is also current practice to take a business view of the economy without consideration of the broader context of the overall social economy within which commerce operates. All this results in flawed and biased arguments against self-sufficient minimum wages.

The overall beneficial impacts of increasing the purchasing power among poor families are rarely studied. Now a major new study has found that the ripple effects when direct, substantial cash assistance is given to poor families have, “… large positive spillovers on non-recipient households and firms, and minimal price inflation. The researchers in this large-scale experiment in Kenya estimated that a direct cash payment of $1,000 US dollars to poor families within randomly selected communities resulted in a local fiscal multiplier of 2.6 times within the local communities.

In addition to measured improvements in the welfare of the children and families who received an infusion of cash, the experiment reinforced the relationship between income and increased consumption to the benefits of both businesses and the families who did not receive cash payments. Here is an excerpt from the study:

“A large-scale cash transfer program in rural Kenya led to sharp increases in the consumption expenditures of treated households, and extensive broader effects on the local economy, including large revenue gains for local firms (that line up in magnitude with household consumption gains), as well as similar increases in consumption expenditures for untreated and treated households approximately a year and a half after the initial transfers. Local firms do not show meaningful increases in investment, and there is minimal local price inflation, with quite precisely estimated effects of far less than 1% on average across a wide range of goods.” [snip]... The consumption expenditures of untreated households and firms rise substantially in areas receiving large cash transfers…”

The infusion of cash payments to poor families in the study did not come from employers, and the economy of Kenya is very different than the economy here in the US. Directly extrapolating the results isn’t possible. Nevertheless, these findings are hopeful. The high fiscal multiplier stimulus effect on local businesses from increased consumption by poor families appear to mirrored results found here within states and municipalities that have raised minimum wage standards. While the burden of cash transfers from higher minimum wages is on businesses, the literature I’ve seen so far suggests there is still a positive fiscal multiplier within the business community coupled with little increase in unemployment and negligible increases in inflation.

A broader look at the spillover effects of increased base wages might show similarly positive results for the business economy and those workers who are already self-sufficient wage earners. Future studies of communities where the wage base is improved should also look at the wellbeing and overall welfare of children living in low wage households as well as the social wellbeing of the wage earners themselves.

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Further Reading

Debunking the Myth That It's Your Fault You're Poorhttps://aseyeseesit.blogspot.com/2015/09/debunking-myth-that-its-your-fault.html

Myth Busting Data RE: Minimum Wage Increaseshttps://aseyeseesit.blogspot.com/2012/09/myth-busting-data-re-minimum-wage.html

Making the Case for a Living Wage  https://aseyeseesit.blogspot.com/2012/07/making-case-for-living-wage.html

NPR -

Researchers Find A Remarkable Ripple Effect When You Give Cash To Poor Families

 https://www.npr.org/sections/goatsandsoda/2019/12/02/781152563/researchers-find-a-remarkable-ripple-effect-when-you-give-cash-to-poor-families

The Promise Makers of Wall Street

by Brian T. Lynch, MSW

Not long ago a dollar was backed by the promise that it could be exchanged for gold or silver. To back up that promise the US gold reserve was established at Fort Knox in Tennessee, for example. The confidence of our people, and of the rest of the world, in our currency was far less certain than it is today.  The gold standard was perhaps a necessary step towards establishing the good faith of the US Government.

Look at a dollar bill and you will see that it is a Federal Reserve Note. Before the creation of the Federal Reserve Bank, many banks issued their own currency, or "bank notes".  The worthiness of those bank notes wasn't inconsistent. The Federal Reserve Bank standardized and stabilized our national currency. It's important to remember that the word "note" is another word for an I.O.U.  A banknote is a promise that a coin or a paper document can be exchanged for a stated amount of "tangible value."

The important point for this discussion is that all currency is a form of debt. A U.S. Dollar is a government-backed loan. Our trust in its worthiness has become an intrinsic faith in our government's ability to guarantee its face value. (Which is why the Congressional Freedom Coalition's talk of not raising the national debt ceiling is so dangerous.)

I recently saw "Junk" on Broadway. It is a play partially based on the story of Wall Street financier Michael Milken.  It is a cautionary tale of money and corruption. Milken's new approach to finance made him a billion dollars over just four years in the 1980s. He was like a god on Wall Street and all the normal rules didn't seem to apply to him until he got caught breaking the laws he willfully ignored.

More than that, Junk is the story of the paradigm shift Milken pioneered in how modern bankers and business leaders have come to understand wealth and power.  It is a view of wealth that can be summed up by the slogan, "debt is an asset".  Specifically, any financial instrument that reliably conveys the promise of value to another person or entity can be used as a form of currency.

Government regulated Federal Reserve Notes are no longer central to the exchange of wealth. Nor is any physical collateral or real estate necessary. It seems almost any promise of payment for money owed is sufficient to make financial transactions on Wall Street. These creative financial instruments often have clever names and deceptive structures. They are increasingly complex and difficult to understand or regulate. But they all have one thing in common, they are all based on debt. They all create wealth on a promise.

In  Milken's case, he began with generating cash by selling very high risk, but high yield bonds and then using those bonds as collateral to finance corporate takeovers. These "junk bonds" (as they are still called) were used as currency to finance "leveraged buyouts" of other businesses. Whole divisions within companies purchased in these buyouts often had to be chopped up and sold off to pay back these high-interest bonds.

The charges brought against Milken were ordinary financial crimes, such as insider trading. But his creative financing resulted in a whole new banking culture that upended how business was conducted around the world. It has lead to an economic environment where new methods for wealth extraction competes against more conventional methods of wealth creation on a global scale.

The growing methods and culture of wealth extraction do transfer wealth from one party or entity to another but doesn't create new wealth. It doesn't grow or manufacture anything. It only creates more opportunities for the wealthy to grow richer while disadvantaging mid-sized businesses and manufacturers. It is one of the drivers leading us into the next gilded age, but it hard to see just where it is taking us. It is harder still to know what we can do to make our economy work for everyone again.

Nona's Christmas List of 1953

by Brian T. Lynch, MSW

My wife and I were going through some old boxes when we found a small notebook with receipts and hand written notes from mother. On one page was her Christmas list from 1953. I was just eleven-months old that Christmas in 1953. Patty, my big sister, was four.

I was struck by how quaint Mom's list seemed. I can see the  care she took to plan this special day for us. The neatness of her figures are a tribute to her business training at Butler High School where she was the first in her family to graduate from the twelfth grade.  Years later she would put these skills to work in her first bookkeeping  job at Robert Halls clothing store in Rockaway, New Jersey, and later at J.C. Penny  in Dover.  But in 1953 she used her skills to plan our family budget.

I can see her sitting at the kitchen table of our rented bungalow on Lake Parsippany. It was a log cabin that had been a summer cottage before being  converted to a year-round home.  It had a fenced in yard and an wonderful enclosed porch that overlooked the lake. The kitchen was just wide enough to accommodate a small chrome legged table with aluminum sides and a Formica top. Mom would sit there in the morning light after Dad left for work, sipping her coffee and enjoying a crossword puzzle or paying the bills. It was her quiet time before my sister and I were awake. It was probably one of these quiet mornings when she penciled this account of our Christmas.  She had gone though each receipt, punching holes in them to file them in her little black, ring bound notebook.

Dad usually left for work most mornings while I was still sleeping. He was an appliance repair man for Sears, which was called Sears and Roebuck back then (I always felt sorry for Mr. Roebuck when they dropped his name. I still think that the change in business model behind this was the beginning of the companies decline).  He worked his full eight-hour day, five days a week and was usually able to be home by dinner.  I have one early memory when I was three or four years old of waking up before Dad left for work and running to the front door to say good-bye to him. But in 1953 I was just an infant.

I don't know how much Dad was paid for his work. He was very skilled, some said gifted, at this job. I do know whatever he was paid was enough that Mom stayed home with us until I was in school. We weren't rich, but we had all the things we needed; food, a warm house, clothes, shoes, a doctor who took good care of us and a few nice things to open under the Christmas tree each year.  I know from bits of conversation I heard when I was older that Stretching the budget was always a challenge, but we managed.

Then, after reminiscing about the past,  I asked myself, how much did Christmas cost my parents in 1953?

Including the cookie cutters and cookie sheets, which would become fixtures of our childhood holiday celebrations, Christmas that year cost them just shy of thirty bucks.  But how much is that relative to today's dollar? It seemed like pocket change based on the numbers.

According to the Bureau of Labor Statistics Inflation Calculator, a dollar in 1953 was worth $8.91 today. That means Christmas cost our parents $288.93, not including food, beverages, gifts between my parents or gifts for friends and relative. And, of course, there was the cost of the Christmas tree. What follows is Mom's 1953 Christmas accounting in 2015 dollars:

This suddenly seemed like a lot of money.  I looked it up. Half of all Sears appliance technicians today make between $16 and $22 per hour.  The current living wage for a family of four (two children and two adult with only one breadwinner) in Morris County is $24.93/hour. That means over half of all Sears repairmen make less than a living wage.  Living in Morris County as a full-time Sears technician today, means either working a lot of overtime or having a second income just to break even.  Mom was being frugal and wise back then, but I doubt our childhood family, with only Dad working, would be able to afford such a Christmas these days.

Now when I look at Mom's figures they seem less quaint and more savvy.  A family today that is like ours was in 1953 would never be able to save up for a house, own a new car, go on a family vacation or get by without occasional assistance from family, friends or the government.

We constantly ask families to do more even though they already do. In most families like ours both parents work. The hours most of us work per week are more numerous. Many parents have more than one job, and children get to be with their parents less and less.  Is it no wonder people say that families are falling apart these days?

Money can't buy love, but a living wage can make us feel good about ourselves once again as we can take proper care of our families.  And returning to a 40 hour work week would allows us to spend more precious time with our children who really do need us to be there for them. These simple conditions are what made America strong in the past. They would certainly strengthen our families once again today.

Should Living Wage Minimums be Based on Individuals or Families?

by Brian T. Lynch, MSW

“No business which depends for existence on paying less than living wages to its workers has any right to continue in this country... By living wages, I mean more than a bare subsistence level — I mean the wages of a decent living.” (1933, Statement on National Industrial Recovery Act - Franklin Delano Roosevelt)

Question:  In looking at the Living Wage calculator, I see that $10.83 for a single adult in Morris County, New Jersey where I live. This seems fair to me for a single person, but when you add one child to that scenario the rate jumps to $22.12 per hour. This raises a serious question.  Does the Living Wage Movement suggest that wages should be adjusted according to need? [ http://livingwage.mit.edu/ ]

Answer:  That's a great question. I am not a spokesman for, or advocate of, the living wage movement as an organization. I do believe that living wages should be the minimum wage in this country.  Minimum living wages should be what we pay summer college help or student interns, not full-time employees. It might also be appropriate for part-time seasonal help. It shouldn't be what we pay permanently hired employees.

To answer your question, I researched what a living wage is in the 130 cities that have living wage laws. It turns out that their wage base is for a single employee, not including any dependents. A living wage in Manchester CT equals $15.54/hour (the highest) while it is $8.50 in Orlando FL (the lowest).  It would appear that the Living Wage Movement is looking to index a minimum living wage minimum to local economies based on one adult with no dependents.

That said, the minimum wage in 1986 was $10.86/hour  as opposed to its current level of $7.25/hour.  If it had been indexed to inflation in 1986 the current minimum wage today would be $23.59/hour today. That clearly was intended to provide for a worker with a family. The current median family size is 2.54 persons per household. That inflation adjusted wage equals about $47,000 per year while the current median family wage is a little over $51,000 per year (and still declining, I might add).

Here's the thing, we have only been talking about wage adjustments to keep pace with inflation. We have not been talking about raising wages to reward workers for our growing productivity. We haven't been talking about sharing the wealth that workers help create so everyone keeps pace with America's growing economy. Cost of living adjustments are important, but they shouldn't be confused with a productivity, or merit raise.

America is $1.7 trillion richer today than it was in 1976. Our economy has doubled, yet the share of all that new wealth created by American workers in this same period is insignificant.

In the 1960's my father was an appliance repairman at Sears. His salary was enough that my mother could stay home and raise my sister and me. Her role as mother to the next generation of citizens was valued. Today, a typical family of four earns about $51,000 only because both parents work. They are only able to make ends meet because of easy access to credit to shift their financial burdens onto their future earnings.

When I speak about a living wage I dream of getting back to a point where one breadwinner can hold one full-time job and still raise a small family without needing government assistance to do it. That's what we had, and that should be our goal for America.

Minimum Wage is a Moral Question

EDITORIAL

by Brian T. Lynch, MSW

“No business which depends for existence on paying less than living wages to its workers has any right to continue in this country... By living wages, I mean more than a bare subsistence level — I mean the wages of a decent living.” (1933, Statement on National Industrial Recovery Act - Franklin Delano Roosevelt)

The White House put out a brief video on why we should raise the minimum wage to $10.10/hour. It is OK as far it goes, but it is still a little disappointing to me.

Click here to see the video. [ https://www.youtube.com/watch?v=PqtLQgkcUFM ]

Even the White House is looking at minimum wage law though the modern day pro-business bias that has infected all of civil government. Even though raising bottom wages creates an economic stimulus that would boost spending, increase demand for goods and services and create more jobs, this isn't the most important aspect. The main reason to raise minimum wages is because it's simply the right thing to do.

The question of minimum wage is actually a moral question. There is no good rationale for paying a full-time employee less than a self-sufficient wage. What is almost half of a human beings waking moments worth? What is the minimum compensation they should receive for devoting that time to enrich their employers? Why should it be less than what is required to survive with human dignity?

From a social perspective, should profitable businesses be held in high esteem as models of efficiency for paying wages so low that full-time employees require taxpayer subsidy to keep from becoming homeless or having their children taken away from them? Should we have to subsidize the labor force of wealthy corporations like Walmart? Should the federal income taxes of those who make more than minimum wage have to be used to supplement the other employees who takes out the trash at night or mow the lawn? Why should any healthy corporation be allowed to boost their profits at public expense through subsidized labor?

If small businesses or start-up company need government subsidies or tax breaks to help pay their help, let these business owners apply for government assistance rather than make their employees feel inadequate by having to beg for government assistance. No man or woman who works hard all day long should have to apply for housing assistance or SNAP or KidCare or childcare assistance or HEAP or any other government subsidy. Let the business owners apply for government aid to help pay employees the self-sufficient wages all full-time workers should have. Let the means testing process for government subsidy programs fall to the employers. Let's get it off the backs of the working poor and eliminate the social stigma they don't deserve. Let the minimum cost of self-sufficient labor wages be part of the cost of doing business in America.

Profits for CEO's and share holders should not come before self-sufficient wages for laborers. Exploiting workers and taxpayers to boost profits for investors and chief executives is immoral.

The Foreclosure Crisis: A Government in Denial

Monday, 01/9/2012 - 11:33 am by Bruce Judson | Post a Comment

The Federal Reserve sent a warning shot that housing is the greatest threat to the economy. The government should take note.

As we start the New Year, the executive branch and Congress continue to pretend the gravest risk to our economy and social stability does not exist: the ongoing foreclosure crisis. The financial crisis began with the housing crisis and it will not end until we resolve housing. Government policymakers who seemingly ignore this basic fact are leading the nation to another potential catastrophe.

This past week, a number of important events occurred in Washington, including important recess appointments by President Obama. However, the most noteworthy event did not make front page news: the Federal Reserve’s (apparently) unsolicited memo to the committees of Congress that oversee financial services warning of the dangers the current housing market poses for the economy. [ http://1.usa.gov/A6ddOc ]

This represents an extraordinary action and underscores both the seriousness of the continuing crisis and the absence of meaningful discussion of the problem in Washington. Bernanke’s memo reviewed federal actions to date and effectively concluded that they were unlikely to solve this national tragedy. The memoconcluded, in part:

The challenges faced by the U.S. housing market today reflect, in part…a persistent excess supply of homes on the market; and losses arising from an often costly and inefficient foreclosure process (and from problems in the current servicing model more generally)… Absent any policies to help bridge this gap, the adjustment process will take longer…pushing house prices lower and thereby prolonging the downward pressure on the wealth of current homeowners and the resultant drag on the economy at large.

This memo is notable for several reasons. First, it’s important to remember that when the Fed speaks, it does so in sober, limited terms. So an unprompted Fed warning suggesting “a persistent excess of supply” and a “resultant drag on the economy” is comparable to the Secretary of Homeland Security holding a press conference to warn of the risk of an imminent national emergency. Second, an unprompted memo from Bernanke to the House means that he is so deeply worried he felt the need to speak out in as strong a voice as his position permits. Third, the Fed rarely speaks on issues unrelated to its direct activities. Indeed, The Wall Street Journal subsequently wrote, “For an institution that jealously guards its independence, the Federal Reserve is wading into treacherous political waters.”

Finally, co-ordinated speeches by three top Fed officials further indicate the depth of the Fed’s concerns.  Read more at http://www.newdeal20.org/author/bruce-judson/

Bruce Judson  Follow him on Twitter @BruceJudsonBruce Judson is a senior faculty fellow at the Yale School of Management and the author of "It Could Happen Here: America on the Brink," which explores the impact of extreme economic inequality and a collapsing middle class on the nation's political stability. Judson is a best-selling author, a successful entrepreneur and one of the nation's leading experts on the impact of technology on businesses. His books, which include "Go It Alone!", "HyperWars" and "NetMarketing," have focused on empowering the individual to succeed in today's business arena. Judson received his JD his MBA from the Yale. He was the co-founder and editor-in-chief of the Yale Journal on Regulation, as well as a senior editor of the Yale Law Journal. Bruce lives in the Hudson Valley with his wife and two daughters

Universal Health Care Would Liberate Free Enterprise

by Brian T. Lynch

There is a free market angle to the US health care debate that escaped media attention in the lead up to “Obamacare.” To little was said about how universal health care completely liberates entrepreneurship and benefits community based businesses.  The private health insurance industry, with its corporate friendly discounts, systematically handicaps small business owners and discourages enterprising individuals from striking out on their own.  Only larger companies and major corporations can afford health care benefits for their employees these days, thus attracting the best and brightest.  This gives them a competitive advantage over small businesses and tamps down potential competition.  The impact is hard to overstate.  Perhaps the point can best be made by considering a contrasting example. 

Whatever its flaws, real or exaggerated, the health care system in Canada is available to all residents.  It isn’t offered through employers or private insurance carriers and there’s no such thing as a “prior condition.” 

Clifford and Laura are a wonderful Canadian couple who live in Toronto.  They are beneficiaries of the Canadian health care system. Both are college educated and in their late fifties with two grown children.  When I first met Clif in the 1970’s, he worked for one of Canada’s national banks.  He had a handsome office on the 14^th floor overlooking the Toronto skyline.  He received a good salary, his prospects for advancement were great… and he hated his job. 

What Clif really liked to do was work with his hands and make things from wood.  So he saved some money, quit the bank and set up a small shop making custom office cabinets and countertops.  It was difficult, but he stuck with it and made the best products he could until his business caught on.  It slowly grew to the point where he had to hire fulltime employees. Later on he shifted into making kitchen cabinets and then into a niche making high end European style kitchen cabinets.  He has made a very comfortable living.  More than that, he was able to follow his passion and is still doing what he loves. 

I never knew that universal health care played a role in Clif’s decision years ago.  The subject came up recently when he asked me to explain why universal health care was so contentious in the States.  As we talked I came to appreciate just how free Canadians are to pursue their own dreams, to hire employees when their businesses expand, and to let them go when business is bad.  Clif's decision to go into business was unimpeded by prohibitively high insurance costs or the potential financial disaster an injury or illness might cause when he started out.

When the private health insurance industry isn’t serving itself or its investors, it serves the interests of America’s largest companies by discouraging individual initiative and squeezing out small businesses with ever rising premiums.  I don’t know if this is by design, but is a fact that has profound consequences.

To take just one example, consider the hierarchy of career tracts that we market to students in our high schools. The grand vision is always “college prep” and the prospect of working for a major corporation that pays well and provides great benefits. So prominent is this college tract bias that all  alternative career paths carry some stigma.  Industrial arts students, for example, are often thought of as college-prep “drop outs” who are “placed” in a vocational track.  Seldom is it viewed as an equally legitimate and valuable career path for those gifted with mechanical abilities and a real desire to develop creative, hands-on talents.  This discounting of alternative careers is reinforced by the absence of universal health.

A large part of what drives our career choices is the fear of losing out on corporate benefits. Providing free and universal health care to all our citizens would liberate all the “Cliffors” of America to strike out on their own and create new businesses.  It would give small businesses a more level playing field on which to compete and give everyone else the comfort of knowing our health needs will always be met.

Any plans to reduce the influence of corporations in our daily lives should certainly include universal health care.  We are the last hold out in the industrialized world.

A Trillion-dollar Bailout for Main Street ?

What a great idea. I hope the White House is listening. This would go a long way towards providing real relief for the suffering middle class.

January Surprise: Is Obama preparing a trillion-dollar, Mass refinancing of mortgages?

By James Pethokoukis

January 4, 2012, 3:46 pm

Full Story At: http://bit.ly/xADBS2

This could be just the beginning. If President Barack Obama’s legally dodgy appointment of Richard Cordray to head the consumer finance agency should stick, it may open the door to more such actions. Here’s Jaret Seiberg of the Washington Research Group:

To us, the most important takeaway from a recess appointment of Cordray is that the President could use this same maneuver to put a housing advocate in charge of FHFA.

And why is that important? The Federal Housing Finance Agency is the regulator and conservator of Fannie Mae and Freddie Mac. And the FHFA currently has an acting director, Edward DeMarco. If Obama replaces him with a “housing advocate” via the same recess appointment process, here’s what might happen next, according to Seiberg:

That could lead to a mass refinancing program for agency-backed mortgages that would go well beyond the existing HARP program. That could hurt agency MBS pricing and result in higher financing costs going forward. Yet it also could be a big boost for the economy and housing going into the election

 For the Full Story,  click here!

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Our Consumer Financial Protection Bureau Stands Up

January 4, 2012 was a good day for consumers of financial products in America.  Here is a message from Richard Cordray, the CFPB's first Director which I am posting here to mark the occasion. 

Standing Up for Consumers

By Richard Cordray

Today, I was appointed by President Obama to serve as the first Director of the Consumer Financial Protection Bureau. I am honored by this opportunity to continue my work on behalf of consumers. And I am energized by the responsibilities and challenges facing the Bureau.

The importance of this day has less to do with me personally and much more to do with you -- and the millions of individuals and families across the country who access consumer financial markets every day to participate in our economy and to pursue their dreams and aspirations. That's because now, with a Director, the CFPB can exercise its full authorities -- with respect to both banks and nonbanks -- to help those markets operate fairly, transparently, and competitively.

Consumer finance is a big part of our economy - - and it plays a large role in the daily life of almost every American. Few people spend their entire lives with so much wealth available to them that they never need to borrow money. Whether it is to pay the bills and meet their everyday needs, or to finance larger investments in their futures like aneducation or a home, most people find it necessary to use financial products to access credit.

Financial products can help make life better, but they can also make life harder. Most of us know at least someone -- a parent or sibling or friend -- who has money troubles. Sometimes, those troubles are caused by a tough break or just not having enough money to go around; other times, by a poor decision. But sometimes, those consumer money troubles arise out of problems in the consumer financial markets. I have seen senior citizens lose their life savings to scams and fraud. I have seen young adults start their lives with crushing student loan debt burdens that they cannot afford. I have seen families bankrupted, and thrown out of their homes, by complex mortgages with spiraling interest costs and monthly payments that were never clearly explained.

In its first six months, the CFPB has taken significant steps to make consumer financial markets more transparent so they work better for consumers and for responsible businesses. Our Know Before You Owe campaign has worked to improve disclosures and make the costs, risks, and benefits of financial transactions easier for consumers to understand. We have also launched our bank supervision program. CFPB examiners are now on the ground at the nation's largest financial institutions, reviewing documents and asking tough questions about how these banks are complying with consumer financial protection laws.

One difficulty we faced until now was that, without a director, we were unable to address all the problems we were created to tackle. In particular, we lacked the ability to supervise financial institutions other than big banks -- like nonbank mortgage lenders and servicers, and payday lenders. Many of these institutions had no regular federal oversight in the run up to the financial crisis. They led a race to the bottom that pushed aside responsible businesses, including community banks and credit unions, and greatly harmed consume rs.

I am pleased to say that we will now be able to exercise the full authorities granted to us under the law and begin to supervise these nonbanks. Standing up this program is a top priority for the CFPB. Over the coming weeks we'll be announcing more information about this program and how it will help to improve the consumer financial markets.

As we move forward, please let us know what you think. My colleagues and I are determined to deliver positive results for American consumers in all of our efforts. We want people to know what we are doing and we want to hear their reactions. We are co nfident that, with help and input from consumers and honest businesses, we can play an important role in safeguarding consumers, consumer financial markets, and the American economy.

http://www.huffingtonpost.com/richard-cordray/standing-up-for-consumers_b_1184002.html





Jen Howard

Consumer Financial Protection Bureau

E: Jennifer.Howard@cfpb.gov

O: 202-435-7454

C: 202-297-7293

Occupying Jesus and His Church

This post comes from my favorite investigative journalist site, ConsortiumNews.com. Robert Parry is amazing and if you have never visited his site, or read any of his books, I would recommend them to you. - Brian

December 18, 2011

It is an inconvenient truth for mainstream and right-wing Christians that Jesus was crucified for taking his protest against income inequality to the power center of Jerusalem, where he challenged how money had perverted religious principles. Now, that tension is returning with the Occupy protests, Rev. Howard Bess says.

By the Rev. Howard Bess

St. Paul’s Cathedral in London is a magnificent building. Visitors swarm to visit this 400-year-old architectural wonder that is known as England’s Cathedral. Until recently people did not take note that it was located in London’s financial district, where it seemed God and mammon existed quite comfortably next door to each other.

Then came the protesters. The Occupy Wall Street movement has not simply spread all across America. It is a worldwide protest movement that covers the globe. More and more people of conscience do not believe that the wealth of the world should be controlled by a relatively small group of greedy, selfish super-rich.

In Christian teaching, greed is one of the seven deadly sins. From a more secular point-of-view, few believe that billions should live in poverty while the elite rich live in flagrant luxury. When the protesters arrived in The City (as London’s financial district is known), their banners read “Occupy London Stock Exchange” – and they encountered London police, who protected the banks and trading houses, as expected.

However, when the protesters took over the spacious courtyards of England’s Cathedral, another dynamic emerged. After all, Jesus was a protester in the courtyard of Jerusalem’s great Temple where he disrupted the business of the money-changers. Now, two millennia later, a new tension between Christianity and excess wealth was arising. [See Consortiumnews.com’s “Would Jesus Join the Occupy Protests?”

It takes a lot of money to support an operation like St. Paul’s. The Cathedral collects fees from it visitors and sells them memorabilia of their experience, clearing about $25,000 a day for those sources of income. In an unintended consequence, the protesters shut down the entire operation, sending losses of income into hundreds of thousands of dollars. The graffiti they painted on the walls of the Cathedral was very upsetting, too. Probably as disturbing as Jesus overturning the money tables in Jerusalem’s Temple.

Should England’s Cathedral resort to calling in the London police? Should the Episcopalian authorities try to negotiate with their newest neighbors? Should their uninvited guests be allowed to use the Cathedral’s restrooms?

The Cathedral’s vacillation is recorded in their daily news releases. The Dean of the Cathedral has resigned. So also have other staff members. For the present, the Cathedral has decided to allow the protesters to stay through the end of the year. The final chapter has not been written. The conflict between God and mammon can become very real. (A similar standoff is developing between the ousted Occupy Wall Street protesters and Trinity Church in Lower Manhattan over a potential new protest site on church-owned Duarte Square.) 

I confess that I would not have taken any note of the drama in London were it not for a friend of mine, Owen Vigeon, a retired Episcopal priest, who lives in London. Owen is a very fine poet who occasionally sends me some of his work. I like poetry, but I love poets.

I am reminded that almost all of the Old Testament prophets were poets. Poets can effectively speak truth in a way that mere preachers or politicians can never master. They say things so very nicely until you really think about it.

Owen sent me his latest poem. It is obviously inspired by the occupation of St. Paul’s. I am privileged to share it with you all:

MAGNIFICAT OF THE PROTESTERS 2011

A Song of the Word Made Flesh

“And the word was made human, and he pitched his tent among us.”  John 1:14

When I pitched my tent in the human race

And stirred in my mother’s womb,

Her soul was roused to prophetic grace

As she warned of impending doom.

When the mighty will lose their seat and power

And the meek and humble joyfully flower.

When the rag tag and bobtail pitched their tents

On St. Paul’s Cathedral holy gate

To register their discontents

With an un-egalitarian state,

My Clergy seemed somewhat perplexed

To know what ought to happen next

And truth to tell the English nation

Showed both disgust and admiration.

Yet in Cathedrals everywhere

There hung on the November air

The echo of My Mother’s prayer

That tells what Heaven thinks is “fair.”

Each waft of Chorus Evensong

Conveyed God’s sense of right and wrong

Who stuffs the hungry with bonus pay

While the rich he is sending empty away.

This, as My Dad confirms to me,

Is what life is like in eternity.

Til then I fear My Mother’s vision

Will still be met with indecision.

But those whose banner now display

The motto “WHAT WOULD JESUS SAY?”

Had better learn the gospel truth

Which I have practiced since my youth.

Whatever the questions you may have selected,

My answers will always be quite unexpected.

OWEN VIGEON  2011

Merry Christmas to all.

The Rev. Howard Bess is a retired American Baptist minister, who lives in Palmer, Alaska.  His email address is hdbss@mtaonline.net

A Labor Day Quiz- How Are We Doing?

Happy Labor Day!  It's a time once again to reflect on how we came to have a middle class.  How much to you know about economic changes in America's labor force over the last 30 years?  


An article entitled “The Speedup” in the July-August, 2011 edition of Mother Jones, written by Monika Bauerlein and Clara Jeffery, takes a look at this issue.  I created a pop quiz based on some of the facts in the article. Take the quiz to see how well you are doing as an American worker. There are only 7 questions.

1.      What does the USA have in common with Papua New Guinea, Sierra Leone, Liberia, Samoa and Swaziland?

a.       We all celebrate the Fourth of July

b.      Like us, baseball is their national pass-time.

c.       We are the only six nations on earth that don’t have mandatory paid maternity leave.

2.      In the last 30 years, American worker productivity (which can be measured as the amount of work we accomplish per hour) has:

a.       Declined by 75%

b.      Increased by 140%

c.       Increased by over 240%

3.      Increased productivity means more company profits since the labor costs per item is lower.  So, given your answer to question number 2 above, in the past 30 years the average overall wages in the US has:

a.       Decreased by 20%

b.      Increased by over 50%

c.       Increased by only 16%

4.      Over this same 30 year period, the average income of the top 1% of Americans:

a.       Increased by 20%

b.      Increased by 40%

c.       Increased by over 80%

5.     The number of hours everyone works in a given week is something that impacts our family life, and the nations GDP.  Germany has the highest GDP in Europe.  So how many more hours per year (actual time on the job) do American’s work compared to German workers?

a.       We work 80 hours, or almost two weeks more per year.

b.      We work 198 hours, or almost five weeks more per year.

c.       We work 378 hours, or almost 10 weeks more per year.

6.      In this current recession the GDP of every nation initially plunged, but no nation was hit harder than Japan.  Japan's GDP dropped twice as much as did ours.  So when it comes to jobs lost, which nation has the worst unemployment rate?

a.       Canada

b.      Japan

c.       USA

7.      One last question.  In 1950 nearly 35% of all wage or salary earners in America were in a union.  What percentage of this group were union members as of last year?:

a.       About 25%

b.      Almost 20%

c.       Less than 15%

If you answered each of the above question with option C you are well informed.  Congratulations!   


If you didn’t answer C to any of the questions, you really should read the article in Mother Jones. 
In fact, we all need to be better informed so we can come together to restore a measure of economic justice in America.  Here are a few additional details regarding the quiz questions:

1.      Not only is the US only one of 6 countries that don’t have paid maternity leave, we are one of 16 nations that don’t require our workers to have time off each week.  We are one of only 9 nations that don’t require businesses to offer a paid annual leave.  Every one of our competitor nations provide this for their citizens.

2.      While productivity has soared in the last 30 years by over 240%, the real value increase in the minimum wage since 1990 went up by just 21%.  The increase in the cost of living rose 67% since 1990.  Our output of goods and services in most sectors of the economy far outstrips the employment that most of these sectors create. 

3.      While income for the wealthiest 1% of American’s rapidly rises every year, the wealth owned by the rest of us actually declined slightly during the Regan years until about 1997.  The increase since then is anemic compared to the enormous amount of wealth created by our great American labor force.

4.      The rise in income among the wealthy, as large as it is, pales in compared to their rise in wealth.  The top 20% of the wealthiest Americans today own almost 85% of everything leaving just 15% of the remaining wealth for the rest of us to share.

5.      Not only do American’s rack up more time on the clock than our competitor nations (almost 10 weeks per year more than Germany) this doesn’t include the time we work off the clock.  For example, half of us check emails on weekends and 46% of us even check work emails on days we are home sick.  

6.      Japan was hit twice as hard by the recession in terms of their drop in gross domestic product (GDP), yet our employment rate dropped more than twice their rate. Canada’s decline in GDP and employment initially mirrored our own (not quite as bad) but today their employment rate is higher than it was before the recession while we are worse off than all our competitor nations.  Mean while, many American corporations are reporting record high profits. 

7.      The declining trend in union membership in America is in lock step with the decline of the middle class.   The poor have faired even worse.  Union workers today make about $10,000 more per year than non-union workers, yet the working public would rather trash unions than join one.  The tensions between private sector employees and public sector workers is largely the result of envy by private sector workers who lost higher wages and many of their benefits when they lost their union.  

How do you think we are doing as Americans?  Most Labor Day articles remind us of the social battles and sacrifices prior generations have faced to bring a little dignity into our lives. We are doomed to repeat the mistakes of history if we don’t learn from them.  I hope this quiz highlights where America may be headed and prompts you to consider what it will take to save the middle class. This is the real purpose for celebrating Labor Day.

Brian 

First published in 2011, nothing much has changed since.