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The War on Elizabeth Warren Print
Monday, 21 March 2011 10:23

Paul Krugman writes: "The fact that she's so well qualified is, of course, the reason she's being attacked so fiercely. Nothing could be worse, from the point of view of bankers and the politicians who serve them, than to have consumers protected by someone who knows what she's doing and has the personal credibility to stand up to pressure. The interesting question now is whether the Obama administration will see the war on Elizabeth Warren for what it is: a second chance to change public perceptions."

Portrait, New York Times columnist Paul Krugman, 06/15/09. (photo: Fred R. Conrad/NYT)
Portrait, New York Times columnist Paul Krugman, 06/15/09. (photo: Fred R. Conrad/NYT)



The War on Elizabeth Warren

By Paul Krugman, The New York Times

21 March 11

 

Last week, at a House hearing on financial institutions and consumer credit, Republicans lined up to grill and attack Elizabeth Warren, the law professor and bankruptcy expert who is in charge of setting up the new Consumer Financial Protection Bureau. Ostensibly, they believed that Ms. Warren had overstepped her legal authority by helping state attorneys general put together a proposed settlement with mortgage servicers, which are charged with a number of abuses.

But the accusations made no sense. Since when is it illegal for a federal official to talk with state officials, giving them the benefit of her expertise? Anyway, everyone knew that the real purpose of the attack on Ms. Warren was to ensure that neither she nor anyone with similar views ends up actually protecting consumers.

And Republicans were clearly also hoping that if they threw enough mud, some of it would stick. For people like Ms. Warren - people who warned that we were heading for a debt crisis before it happened - threaten, by their very existence, attempts by conservatives to sustain their antiregulation dogma. Such people must therefore be demonized, using whatever tools are at hand.

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Safety on the Cheap Print
Wednesday, 16 March 2011 10:22

Robert Reich writes: "Can we please agree that in the real world corporations exist for one purpose, and one purpose only - to make as much money as possible, which means cutting costs as much as possible? The New York Times reports that GE marketed the Mark 1 boiling water reactors, used in TEPCO's Fukushima Daiichi plant, as cheaper to build than other reactors because they used a comparatively smaller and less expensive containment structure."

Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)



Safety on the Cheap

By Robert Reich, Robert Reich's Blog

16 March 11

 

 

an we please agree that in the real world corporations exist for one purpose, and one purpose only - to make as much money as possible, which means cutting costs as much as possible?

The New York Times reports that GE marketed the Mark 1 boiling water reactors, used in TEPCO's Fukushima Daiichi plant, as cheaper to build than other reactors because they used a comparatively smaller and less expensive containment structure.

Yet American safety officials have long thought the smaller design more vulnerable to explosion and rupture in emergencies than competing designs. (By the way, the same design is used in 23 American nuclear reactors at 16 plants.)

In the mid-1980s, Harold Denton, then an official with the Nuclear Regulatory Commission, said Mark 1 reactors had a 90 percent probability of bursting should the fuel rods overheat and melt in an accident. A follow-up report from a study group convened by the Commission concluded that "Mark 1 failure within the first few hours following core melt would appear rather likely."

Sound familiar?

The National Commission appointed to investigate the giant oil spill in the Gulf of Mexico last April recently concluded that BP failed to adequately supervise Halliburton Company's work on installing the well.

This was the case even though BP knew Halliburton lacked experience testing cement to prevent blowouts and hadn't performed adequately before on a similar job. In short: Neither company bothered to spend the money to ensure adequate testing of the cement.

Nor did Massey Energy spend the money needed to ensure its mines were safe.

And so on.

Don't get me wrong. No company can be expected to build a nuclear reactor, an oil well, a coal mine, or anything else that's one hundred percent safe under all circumstances. The costs would be prohibitive. It's unreasonable to expect corporations to totally guard against small chances of every potential accident.

Inevitably there's a tradeoff. Reasonable precaution means spending as much on safety as the probability of a particular disaster occurring, multiplied by its likely harm to human beings and the environment if it does occur.

Here's the problem. Profit-making corporations have every incentive to underestimate these probabilities and lowball the likely harms.

This is why it's necessary to have such things as government regulators, why regulators must be independent of the industries they regulate, and why regulators need enough resources to enforce the regulations.

It's also why the public in every nation is endangered if the political clout of its biggest corporations - BP, Halliburton, Massey, GE, or TEPCO - grows too large.


Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including "The Work of Nations," "Locked in the Cabinet," "Supercapitalism" and his latest book, "AFTERSHOCK: The Next Economy and America's Future." His 'Marketplace' commentaries can be found on publicradio.com and iTunes.

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2,405 Shot Dead Since Tucson Print
Tuesday, 15 March 2011 10:43

Andrew Romano and Pat Wingert report: "Since the shooting of Gabrielle Giffords in Arizona, the number of Americans killed by guns has not let up. How a court ruling and Dick Cheney have given Obama a chance he should take."

Colin Goddard in his hospital bed in Blacksburg, Virginia, three days after the shooting at Virginia Tech in 2007. (photo: Charles Ommanney/Getty Images)
Colin Goddard in his hospital bed in Blacksburg, Virginia, three days after the shooting at Virginia Tech in 2007. (photo: Charles Ommanney/Getty Images)



2,405 Shot Dead Since Tucson

By Andrew Romano and Pat Wingert, Newsweek

15 March 11

 

Since the shooting of Gabrielle Giffords in Arizona, the number of Americans killed by guns has not let up. How a court ruling and Dick Cheney have given Obama a chance he should take.

n a snowy Wednesday evening in February, the main attraction on the marquee at the Lyric Theatre in Blacksburg, Va., was True Grit, the Coen Brothers' bloody homage to the shoot-'em-up Westerns of Hollywood's Golden Age. But the movie playing inside had a very different message to send.

Four years ago, on April 16, 2007, Colin Goddard was one of 49 people shot by Seung-Hui Cho in Virginia Tech's Norris Hall, a mere 1,000 yards from the Lyric Theatre - and one of only 17 who survived. Shortly after 9 a.m., Cho forced his way into Goddard's French class, firing on the teacher and then methodically stalking the aisles, pumping an estimated 200 bullets from his Glock 19 and Walther .22 into every student he could see. Goddard was hit four times: twice in the hips, once in the right shoulder, once in the left knee.

Now he had returned to the scene of the crime. Throughout Goddard's long recovery - it took a titanium implant and months of physical therapy before he could set aside his crutches and cane and stand on his own two feet - he'd told himself that he wouldn't let the Virginia Tech massacre define him. He would graduate and move on with his life. But then came April 3, 2009, and with it a mass shooting at a Binghamton, N.Y., immigration center that left another 13 people dead. "I watched it on TV all day," Goddard tells NEWSWEEK. "I knew that all those families were rushing to hospitals without knowing what the outcome would be, having their lives turned upside down. I thought, can we really not do something to make this less likely? I decided I couldn't just sit quietly. I had to find a way to address this."

In a few minutes, the result of Goddard's efforts, a pro-gun-control documentary called Living for 32, would debut before a full house of 450 Hokies. Fresh from an acclaimed run at Sundance, the film was tragically well timed. A little more than a month earlier, in Tucson, Ariz., a college dropout named Jared Lee Loughner had gunned down Arizona Rep. Gabrielle Giffords and 18 others, killing six; the previous weekend, 11 students had been shot and one student killed during a fraternity party in Ohio. The issue was in the air.

But this night, in this town, where the horror of gun violence was no longer an abstraction, had a resonance all its own. "Bringing it here, I thought, was very important," Goddard, 25, told the audience, emotion evident in his voice. "This is where I grew up as an adult. This is where I came to understand that from such bad can come good." Staring out from the stage, he saw his fellow ROTC members and remembered when they'd passed the Army's basic rifle marksmanship course together. He saw a couple of his fraternity brothers and remembered the good times they'd had at the local shooting range. Making the documentary, Goddard said, "has been part of my healing process." But every time there's "another Tucson," he confessed, "I'm right back here again." Then the lights dimmed, and the film began.

Are people like Colin Goddard crazy for thinking that they can change the politics of guns in America? Most Beltway types would say yes, and with good reason. The National Rifle Association, which regularly ranks as the most powerful lobbying group in Washington, has long had a stranglehold on the issue. By outspending, out-organizing, and out-politicking its opponents, the NRA persuaded Democrats, who can control Congress only if they control red districts, to abandon gun safety in the 1980s and 1990s, and since then it has successfully pressed for ever-looser local laws. Consider the case of Tombstone, Ariz., which lies 70 miles southeast of Tucson. When Doc Holliday and Wyatt Earp shot up the O.K. Corral in 1881, civilians weren't allowed to carry guns in town; a local ordinance required visitors to check their weapons at the Grand Hotel or the sheriff's office. But today, Tombstone residents are free to pack concealed firearms pretty much wherever they want, without a permit. The state is now wilder than the Wild West.

The national numbers tell the larger story. Over the last two decades, the pro-gun lobby has outspent gun-control forces by a factor of 20 to 1, according to the Center for Responsive Politics; in 2008 alone, the NRA and its allies shelled out $2.4 million, or 41 times what the other side was able to spend. In 1988, 18 states had laws that made it easy for civilians to carry concealed handguns in public; now that number is approaching 40. New Mexico may expand concealed carry to elementary schools and preschools and "liquor establishments"; Michigan has pushed to open up day-care centers, sports arenas, and hospitals. Public opinion, meanwhile, has been trending in a similar direction. In 1959, for instance, 60 percent of respondents told Gallup they favored a ban on handguns except for "police and other authorized persons." Now, after absorbing decades' worth of NRA messaging - and after a recent drop in crime that sapped some urgency from the issue - more than 70 percent of voters oppose it. Few politicians are eager to paddle against such a powerful tide, which is why so many of them called for "a new era of civility" after one of their colleagues was shot in the head - as opposed to, say, a new era of gun safety. "When I talk to lawmakers in D.C., they're always polite," says New York Mayor Michael Bloomberg, an outspoken gun-control advocate. "But they always say the same thing: 'Well, guns are important, but I can't really get into that now.'"

President Obama is no exception: he's spent the two months since Tucson paying lip service to the issue. Shortly after the shooting, three of his heaviest hitters - David Plouffe, Robert Gibbs, and David Axelrod - began to drop hints about the president's intentions. Axelrod said there's "no doubt" Obama "will engage in…that debate." Plouffe went further, noting his boss's support for the assault-weapons ban and promising that "he's going to address this." Asked last week for an update, a senior White House official told NEWSWEEK that advisers are still "exploring a variety of ways the president could" weigh in. It's hard not to wonder whether Obama's plan is to pacify liberal critics by continuing to mention some vague dream of addressing gun safety at some wispy future date - then to cross his fingers and hope they forget.

If you believe the conventional wisdom, this strategy makes a certain sense: why distract the electorate with a wedge issue when the economy is shaky and the Middle East is blowing up? But what if the chattering class is wrong? What if Obama is missing a rare opportunity? As much as he might like to move on, the issue isn't going away - nor should it. On March 4, a federal grand jury returned a 49-count indictment against Loughner, to which he has pleaded not guilty; a few days later, authorities released autopsies of his victims. Last week doctors revealed that Giffords is now walking, speaking in full sentences, and planning to attend her husband's shuttle launch in April. The wires, meanwhile, were filled with reports of fatal shootings: at a Sanger, Calif., birthday party; a Georgia apartment complex; a San Antonio carwash. All told, an estimated 2,405 Americans have been shot and killed since Tucson, adding to the grim toll of 400,000 felled by guns since Martin Luther King Jr. and Robert F. Kennedy were assassinated in 1968. (The estimate of gun murders and accidental deaths is based on Centers for Disease Control and Prevention data.)

Gun-safety advocates would argue that Obama has a moral duty to stanch the bleeding, and that may be true. But what's particularly interesting right now isn't the moral equation. It's the practical one. Look beyond the hoary Washington logic, and it's clear that the present moment may be peculiar enough, and the forces at work potent enough, to produce real movement on gun safety - provided Obama proceeds carefully. That means no outlawing specific guns. No relitigating the Second Amendment. And no frantic liberal overreach. Just two precautions that a majority of voters favor, according to a new NEWSWEEK-DAILY BEAST Poll: background checks for every gun buyer (which 86 percent of respondents support) and a revival of the recently lapsed ban on the kind of high-capacity clips that Loughner used in Arizona (which 51 percent support). If Obama came out in favor of these modest reforms, he'd have libertarians (such as the Cato Institute's Robert A. Levy), Republicans (Rep. Peter King), independents (Bloomberg), and Democrats (Sen. Frank Lautenberg) on his side. Even Dick Cheney, a longtime hunter and NRA supporter, now admits that "maybe it's appropriate to reestablish" limits on "the size of the magazine that you can buy to go with semiautomatic weapons." The diversity of this group reflects a simple truth: that the vast majority of us have more in common with Goddard than with the two-dimensional culture warriors - the latte-sipping elites, the paranoid survivalists - who have dominated the debate for decades. We respect guns, gun owners, and the Second Amendment, and yet we want gun violence to be as rare as possible. We know that guns can contribute to a community's safety, and yet we acknowledge that none of the 18 mass shootings since May 2007 was stopped by a legal-handgun carrier. If Obama recognizes this reality, and takes action, it's possible to imagine us having a grown-up conversation about guns for the first time in almost 20 years.

Right now, the signs of hope may be faint. But they do exist. The first is Tucson itself - or, more precisely, the fact that the proposed laws emphasize how preventable Tucson really was. In the House, New York Rep. Carolyn McCarthy, whose husband was killed in a 1993 mass shooting on a Long Island train, has introduced a bill seeking to reinstate the prohibition on high-capacity clips that took effect in 1994 but lapsed when the assault-weapons ban expired 10 years later. It already has 93 cosponsors - "one of the quickest responses from people on the Hill," to the knowledge of Paul Helmke, the former Republican mayor of Ft. Wayne, Ind., who is now president of the Brady Campaign to Prevent Gun Violence. In the Senate, Lautenberg has introduced a mirror version of McCarthy's bill, as well as legislation that requires a background check for every gun sale and prevents people on terrorist watch lists from purchasing firearms or explosives. Meanwhile, Bloomberg's group, Mayors Against Illegal Guns, is pushing to improve the national electronic database of drug abusers, domestic offenders, and the mentally ill, which currently receives only 5 percent of the money assigned to it after Virginia Tech and lacks millions of records required by federal law. (Arizona, for example, should have sent in 122,000 names between 2008 and August 2010, according to the Justice Department; the state submitted only 4,465.) With a comprehensive "can't buy" database and loophole-free background checks, neither Loughner nor Cho would have been allowed to purchase firearms: Loughner's drug use disqualified him from military service, and Cho had a history of mental illness. And without access to high-capacity clips, Loughner would have stopped to reload after 15 rounds instead of 31 - meaning that he would have been tackled and restrained 16 rounds sooner. "Pro-gun people always argue that laws like these wouldn't have saved any lives," says McCarthy. "But of course they would have. Fewer bullets in Loughner's gun means that fewer shots would've been fired - which means that fewer people would have died."

Despite its conservative leanings, the Supreme Court has also been paving the way for a new kind of gun politics. For years, the NRA has invoked the Second Amendment to oppose even the most limited gun-safety measures. First of all, they say, the Constitution guarantees individuals "the right to bear arms," so any restrictions on that right are inherently unconstitutional. And second, once bureaucrats start infringing on a fundamental freedom, what's to stop them from outlawing guns altogether? These arguments may have made some legal sense in the past, but not anymore. In 2008 the court ruled that while the Constitution does establish an individual right to bear arms, it does not rule out "prohibitions on the possession of firearms by felons and the mentally ill, or laws forbidding the carrying of firearms in sensitive places ... or laws imposing conditions and qualifications on the commercial sale of arms." For the first time, the court placed some constitutional parameters on the gun debate. Can the government regulate firearms? Yes. But can it outlaw them altogether? Absolutely not - no matter what the NRA says. "The decision undermined two of the NRA's big arguments," Helmke explains. "One, that you can't have any restrictions on guns, and two, that 'gun control' is code for 'gun ban.'"

It's counterintuitive, but the current political climate might favor gun control as well. No coalition suffered bigger losses in the 2010 midterms than the conservative Blue Dog Democrats, who tend to court NRA support. Meanwhile, only three of the 106 Democrats who backed legislation to close the gun-show loophole lost their seats. The results represent up-to-the-minute proof, says Helmke, that the "NRA can neither save you nor sink you" - an argument that could swing a few Democratic votes in the months ahead. The public, meanwhile, endorses the current proposals, according to the NEWSWEEK–DAILY BEAST Poll: 51 percent want to outlaw high-capacity magazines; 67 percent back prohibiting the sale of firearms or explosives to individuals on terrorist watch lists; 83 percent support fully funding the national background-check database; and 86 percent favor instant computerized background checks for every gun buyer. After tacking right on taxes and spending to appease the newly empowered GOP, Obama will need to throw his base a bone in the run-up to 2012. Gun control is a natural fit: "liberal" enough to please core Democratic constituencies and cheap enough not to bust the budget.

Obama should also be encouraged by new evidence that the GOP isn't particularly invested in keeping high-capacity magazines on the market. As a congressman, Cheney was one of the few Republicans willing to vote against noncontroversial bans on cop-killer bullets and plastic guns, which were designed to evade metal detectors. Now he's open to reviving the moratorium on Loughner-style clips - a huge shift. Conservative stalwart Bill Kristol seems to agree, telling C-Span in January, "Let's look at why this guy could shoot so many shots off so quickly." In his speech to the Conservative Political Action Committee, NRA president Wayne LaPierre didn't bother to explain why high-capacity magazines are necessary. "He knows this is a tough one to defend," Helmke says. Mitt Romney, the GOP's 2012 frontrunner, is on record as saying he "would have signed the assault-weapon ban" - a position that will make it hard for his party to oppose a new, less-expansive prohibition on clips if he's nominated. And in a recent Wall Street Journal column, former Reagan speechwriter Peggy Noonan revealed that ultimately "the Republican Party will not go to the wall to defend extended clips." If Obama and his allies decide to move forward, mainstream Republicans may not battle back as aggressively as everyone expects - even if the NRA insists it "disagrees" with Cheney and Kristol and will "fight any gun-control scenario down the pike," as public-affairs director Andrew Arulanandam tells NEWSWEEK.

Tucson was the first mass shooting or assassination plot in years in which neither the shooter nor his target died in the melee - an outcome that will shape the media coverage in ways that may benefit the gun-safety cause. When a killer commits suicide, there's no need for a trial; when his most prominent victim passes away, a funeral tends to bring the story to an end. But in this case, the coverage will continue indefinitely - Loughner will go on trial; Giffords will keep on recovering - and gun violence will be a topic of debate as long as their twinned tales are in the news. Factor in the anniversaries of Columbine, Virginia Tech, and the 1981 Reagan shooting, which are coming up this month and next, and the president and his friends suddenly find themselves with a larger-than-usual window of opportunity to weigh in. "Obama could go down as one of the greats if he stands up and has the courage to do this," says Bloomberg, who is spending some of his estimated $18 billion fortune on the issue in the years ahead. "We need leadership."

Back at the Lyric Theatre, Goddard was doing his part. Watching his documentary, it was impossible to ignore how little we're doing to stop dangerous people from buying deadly weapons. Of the dozens of private sellers Goddard and his colleagues encountered at gun shows, not one ran a background check before selling them firearms, Goddard says. Vendors in Maine were the toughest: they requested a local ID. "Minnesota has a system where you can get a permit to buy a gun that proves you can pass a background check, and if you don't have that, some people won't sell to you," he says. "But you can just walk to the next table and buy one there without it." In Texas, Ohio, and Virginia, Goddard easily bought semiautomatics, often without bothering to show ID. "I bought AK-47s, TEC-9s, a Mach 11, a slew of handguns," he says. "We could have bought books that tell you how to convert a semiautomatic to a fully automatic and how to make a homemade silencer. There were .50-caliber sniper rifles being sold to the general public almost everywhere we went." In fact, the only time Goddard, who now works for the Brady Campaign, came under close scrutiny was when he delivered his weapons to the police. "I had to show my ID and answer all kinds of questions," he says. "None of which were asked at the point of sale."

As Living for 32 drew to a close and the lights in the Lyric came up, one student asked Goddard what kind of action Congress had taken since Tucson. Not much, he said. Then he smiled ruefully. "You'd think they would realize that all American citizens want to be sure that weapons are not sold to people who shouldn't get them," he continued. "You would think this would reverberate. We need to tell them that there are some simple things that we could be doing. We're going to be here, pushing this, until it doesn't need to be done anymore."

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Why Obama Isn't Fighting the Budget Battle Print
Friday, 11 March 2011 17:53

Robert Reich writes, "In the next week the action moves from Wisconsin to Washington, where the deadline looms for a possible government shutdown over the federal budget. President Obama has to take a more direct and personal role in that budget battle - both for the economy's sake and for the sake of his re-election. But will he? Don't count on it."

Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)



Why Obama Isn't Fighting the Budget Battle

By Robert Reich, Robert Reich's Blog

11 March 11

 

n the next week the action moves from Wisconsin to Washington, where the deadline looms for a possible government shutdown over the federal budget. President Obama has to take a more direct and personal role in that budget battle - both for the economy's sake and for the sake of his re-election. But will he? Don't count on it.

Worried congressional Democrats say the President needs to use his bully pulpit to counter defections in Democatic ranks, such as the ten Democrats and one allied Independent who on Wednesday voted against a Senate leadership plan to cut $6.2 billion from the federal budget over the rest of fiscal year 2011. They want Obama to grab the initiative and push a plan to eliminate tax breaks for oil companies and for companies that move manufacturing facilities out of the country, and a proposal for a surtax on millionaires.

Most importantly, they're worried the President's absence from the debate will result in Republicans winning large budget cuts for the remainder of the fiscal year - large enough to imperil the fragile recovery.

But Obama won't actively fight the budget battle if the current White House view of how he wins in 2012 continues to prevail.

Shortly after the Democrats' "shellacking" last November, I phoned a friend in the White House who had served in the Clinton administration. "It's 1994 all over again," he said. "Now we move to the center."

The supposed parallel between 2010 and 1994 is something of an article of faith in the Obama White House. That's partly because so many of President Barack Obama's current aides worked for Bill Clinton and vividly recall Clinton's own shellacking in 1994. It's also because the Clinton story had a happy ending, at least electorally. The fact that Bill Clinton went on to win re-election is a source of comfort to the current White House as it looks ahead to 2012.

From this, many in the Obama White House have concluded that the president should follow Clinton's campaign script - distancing himself from congressional Democrats, embracing further deficit reduction, and seeking guidance from big business. If it worked for Clinton, it must work for Obama - or so it's supposed.

The superficial logic that so often passes for thought in Washington typically sees causation where there's only correlation. In fact, there's no reason to believe that Clinton's lurch rightward at the start of 1995 is what won him re-election the following November. He was re-elected because of the strength of the economic recovery.

By the spring of 1995, the American economy had bounced back, averaging 200,000 new jobs per month. By early 1996, it was roaring - creating 434,000 new jobs in February alone. I remember suggesting to Clinton's political adviser, Dick Morris, that the president should come up with some new policy ideas for the election. Morris scowled. This election will be about the economy - nothing more, nothing less, he said. Morris knew that voters didn't care much about policy. They cared about jobs. "The president," said Morris, "is going to say, 'You've never had it this good, and you ain't seen nothing yet.'"

The 1991-1992 recession was relatively mild as recessions go. As is typical of most recessions, it had been brought on by the Federal Reserve raising interest rates too high in response to fears of inflation - meaning that a recovery would occur when the Fed reversed course and reduced short-term rates, which then-Chair Alan Greenspan obligingly did.

President Obama won't be as fortunate. The Great Recession resulted from the bursting of a giant debt bubble. Wall Street's irresponsible lending and speculating, negligible oversight by federal regulators, and the insatiable desire of Americans to use their homes as ATMs created a toxic mixture that exploded at the end of 2007 and continues to sicken the economy.

The Fed has kept interest rates near zero for more than a year and has opened the spigots of its discount window, without much result. Unemployment continues to hover around 9 percent. Economic growth is pathetic.

While jobs used to follow corporate profits, American corporations now rack up big profits without expanding employment. Their profits are coming mainly from buoyant sales by their foreign operations - especially in China and India - combined with cuts in jobs, wages, and benefits here in the US.

The richest 10 percent of Americans, who own about 90 percent of all financial assets, are buying again (sales at Neiman Marcus and Tiffany's are way up). But most Americans still have little purchasing power. Under a huge load of debt, worried about meeting mortgage payments, and seeing their major asset - their home - continue to drop in value, they're holding back from the malls.

A strong recovery cannot be sustained by the richest 10 percent. Before the Great Recession, the top 10 percent received about half of total income, but they accounted for only about 40 percent of total spending. Forty percent of spending isn't enough to convince businesses to invest in new capacity and jobs, which is why corporations are still sitting on $1.4 trillion of cash.

So many jobs have been lost since Obama was elected and so many people have entered the workforce needing jobs that even if job growth were to match the extraordinary pace of the late 1990s, year after year, the unemployment rate wouldn't fall below 6 percent until 2016. That pace of job growth is unlikely, to say the least.

If Republicans manage to cut federal spending significantly between now and Election Day while state outlays continue to shrink, the certain result is continued high unemployment and anemic growth.

Obama's challenge in 2012 has nothing to do with Bill Clinton's in 1996. He must fight the Republican plans to cut the budget deficit this year and next, and explain to the public why he's doing so. And he must convince Americans that public spending during the next few years is necessary to get the economy moving, reduce the long-term debt as a portion of the total economy, and get jobs back.


Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including "The Work of Nations," "Locked in the Cabinet," "Supercapitalism" and his latest book, "AFTERSHOCK: The Next Economy and America's Future." His 'Marketplace' commentaries can be found on publicradio.com and iTunes.

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Scott Walker Hurts Wisconsin's Future Print
Wednesday, 09 March 2011 10:29

Jesse Jackson writes: "While the conflict over basic labor rights continues in Madison, sparking support from across the country, we shouldn't lose sight of the other side of Wisconsin Gov. Scott Walker's agenda: slashing investment in the state's future."

Wisconsin Gov. Scott Walker speaks during a press conference at the Wisconsin State Capitol in Madison, 03/07/11. (photo: Getty Images)
Wisconsin Gov. Scott Walker speaks during a press conference at the Wisconsin State Capitol in Madison, 03/07/11. (photo: Getty Images)



Scott Walker Hurts Wisconsin's Future

By Jesse Jackson, Reader Supported News

09 March 11


hile the conflict over basic labor rights continues in Madison, sparking support from across the country, we shouldn't lose sight of the other side of Wisconsin Gov. Scott Walker's agenda: slashing investment in the state's future.

Walker will literally break a covenant - the Covenant Program that promises financial aid for college for middle school students who pledge to get good grades and stay out of trouble. Reward for performance: One would have thought this a conservative program. But it does not survive the sledgehammer Walker would take to education at every level.

The most vulnerable take the greatest hit - and that means Milwaukee's kids. Milwaukee isn't Madison. The former industrial city ranked as the fourth most impoverished city, according to 2009 US Census Bureau figures. Its poverty rate reached 27 percent. This poverty is concentrated among African Americans, almost half of whom live in highly impoverished, largely segregated areas of the city. In Milwaukee County, more than one-third of all young adults are unemployed.

For Milwaukee and other cities, Gov. Walker lowers the boom, calling for $1 billion in cuts, largely from public schools. The South Milwaukee School District summarized the damage: the pool would be closed, music instruction would be eliminated in grades 5-12, high school technical education and business education would be eliminated. Liaison services with the police would be reduced, eliminating drug-abuse resistance education. School breakfasts would be cut by 10 percent, as would poverty aid and bilingual assistance. Aid from the state for nurses would also be zeroed out. Supplemental science and math aid for advanced placement all get cut.

Walker would cut aid by about $500 per student per class. Then he would prohibit localities from raising property taxes to make up for the shortfall. Then he would end limits on vouchers, enabling middle-class parents to remove their kids from schools that he has damaged. He says he'd give school districts the "tools they need to make up for the funds," by which he means eliminating the right of teachers to bargain collectively. But the 7 percent cuts teachers have already conceded in their pay will surely drive many of the best teachers out of the profession.

Walker also would cut state support for cities and counties. He would cut $500 million from Medicaid spending, as well as support for the university system and for community colleges.

He's also announced that he'd reject $800 million in federal funds for high-speed rail, and $23 million to modernize broadband. He says he's worried about the cost to the state. But that didn't stop him from passing some $137 million in top-end tax cuts last year, and seeking $82 million over the next two years. The governor is using the state's budget constraints to make cuts in programs vital to the state's future.

The same dynamic is now going on in Washington. With 25 million people in need of full-time work, House Republicans are scorning both public opinion and economists' advice to push for savage cuts of nearly a quarter of the spending on domestic programs for the remainder of this year. Every part of education funding - from pre-K, to K to 12, to college and training gets cut. Deep cuts are slated for basic security programs in food safety, in clean air and clean water and port security.

The result makes no sense. The cuts will literally cost lives. Goldman Sachs warns if enacted, they will cost 700,000 jobs. And yet, they won't make up for the hole in the budget created by the top-end tax cuts Republicans insisted on last December. In Wisconsin and in Washington, budget deficits resulting from a recession caused by Wall Street's excesses are being used as an excuse to attack the working families and the poor.

In Washington as in Wisconsin, the only question is whether the people will mobilize to limit the damage.

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