Jobs crisis - Represent Consumers

Post-election, President Obama's populism goes missing

When it comes to reviving the middle class and reducing the country’s widening income gap, President Obama in his second term has so far offered little more than a classic bait and switch from the strong promises he made during his successful reelection campaign.

While the president has provided leadership on issues that don’t challenge the economic status quo, like immigration reform and same-sex marriage, his administration is still not bucking the bankers and the austerity hucksters peddling their scams.

Meanwhile, the president pleads for patience, based on the discredited theory that if we just hold out a little longer, the recovery that’s humming along for the 1 percent will trickle down to the rest of us.

When Republicans floated that myth during the Reagan administration, Democratic officials howled. Now they fall in line, with a barely a peep as issues of longtime unemployment, falling incomes, the growth of lousy, low-income jobs and rising health care costs ? without any proposals to address them, at the same time his administration pursues a massive secret Pacific trade deal that dwarfs NAFTA – which was a disaster for jobs in the U.S.

In his inaugural address, the president proclaimed “an economic recovery has begun” and left it at that.

Back in December 2011, the president was warming up the populist theme he would use to batter his opponent, Mitt Romney, as an out-of-touch plutocrat. In Osawatamie, Kansas the president said: “I am here to say the [the supply siders] are wrong. I’m here in Kansas to reaffirm my deep conviction that we’re greater together than we are on our own. I believe that this country succeeds when everyone gets a fair shot, when everyone does their fair share, when everyone plays by the same rules.”

When it came to the economy, Obama blew Romney away. In a Bloomberg poll, respondents were asked who they thought did a better job laying out a vision for the country’s economic future: President Obama beat Romney by 10 points.

But where are the policies that would give that vision even a fighting chance of becoming reality? Since his reelection, the president has pivoted sharply away from the populism that got him elected towards cuts that hurt the very people he said government should protect.

On a recent visit to family in Detroit, I was struck again by the painful gap between the president’s rhetoric and his actions, and the stark contrast between the recovery for the banks and corporate profits and the stock market while ordinary people continue to suffer.

Detroit was hit hard by the 2008 financial collapse, and though the Obama administration helped engineer the bailout of General Motors, the city is still struggling under the weight of years of economic decline and bad politics. Home prices have fallen 35 percent over the past three years. That the unemployment rate has dropped from a post collapse high of 16 percent in September 2009 to 10.6 percent in January, still high above the national rate of 7.9 percent, offers only small comfort.

The city, the seventh-largest in the country in 1990 with more than 1 million people, is now 18th largest, with 700,000 people, and officials have closed schools and laid off teachers. While some auto jobs have returned, they pay half of what they used to, along with scaled-back benefits.

Now the city’s residents are caught in a feud between Michigan’s Republican state government and their own Democratic politicians. While Detroit’s situation may be worse than other old urban areas, the others are not far behind.

Detroit has been particularly hard hit by absorbing the costs of bank “walkaways” – bank-owned properties that the bankers have either decided not to pay taxes on or have abandoned before foreclosure is complete. Officials estimate the cost to the city of Detroit this year at $118 million.

That’s just another example of the costs of bankers‘ irresponsible behavior getting passed on to taxpayers, in this case, the remaining residents of Detroit.

When the bankers triggered a nationwide economic collapse, the federal government stepped in to rescue them with all the resources it could muster – no questions asked. But as Detroit and the nation’s other cities have continued to struggle, there’s not even a decent debate about options to help them.

Of course Detroit’s auto workers are not alone. The majority of jobs created during the “recovery” have been low paying.

Also ignored is the plight of the millions of long-term unemployed. Four million Americans have been unemployed more than a year. That’s 30 percent of all unemployed people – triple the 10 percent before the financial collapse.

But you won’t hear the president or any of the rest of our political leaders say much about those four million people – more than the population of of Los Angeles. They’ve been tossed aside, along with the rhetoric that proved so useful just a few months ago.

Your tax dollars at work fighting unemployment – in the Philippines

If you’re among the millions in the U.S. who are unemployed and need retraining for new work, you are, increasingly, out of luck.

But if you’re a major financial institution that wants to outsource jobs to the Philippines, until a couple of days ago, the Obama administration was spending about $36 million a year to improve the English language skills of your future workers.

Among those taking advantage of outsourced labor in the Philippines, in call centers and IT, are a couple too-big-to-fail, bailed-out financial institutions, Citibank and JPMorgan Chase.

Last week, after a couple of congressmen got riled up about the outsourcing training, the U.S. Agency for International Development said it would “suspend” the program “pending further review of the facts.”

The program was set to expire at the end of the year in any case.

But the fact is that USAID has been offering training for future outsourcing workers for several years, from South Asia to Armenia, Information Week reported. In the Philippines, the U.S. contended it wasn’t just spending the money to subsidize Citibank and other would-be outsourcers; the government said it was actually using your tax dollars as part of an antiterrorism effort in a section of the country with a Muslim minority unhappy with its treatment by the central government.

According to the USAID scheme, the would-be terrorists would be a lot happier once they learned a little English and were able to land a job in a Citibank call center.

Meanwhile the U.S. has been suffering through a staggering economic downturn and the highest unemployment since the Great Depression, as President Obama and other politicians promise to stem outsourcing and bring jobs back to this country.

Since 2007, 500,000 call center jobs have been outsourced from the United States, according to Rep. Tim Bishop, a New York Democrat, and Rep. Walter Jones, a North Carolina Republican, the congressmen who demanded a halt to the program. In 2010, USAID had suspended a similar $10 million initiative to train Sri Lankan workers after Bishop and Jones complained about it.

Despite high unemployment, job training programs and community colleges in the U.S., which also offer the opportunity for workers to learn new skills, have had to go begging. As the New York Times reported last week, “work force centers that assist the unemployed are being asked to do more with less as federal funds dwindle for job training and related services.”

Federal money available for retraining workers is 18 percent lower, in today’s dollars, than it was in 2006, even though there are 6 million more people unemployed, the Times reported.

While the debate over cuts to unemployment benefits has received wide attention, the cuts to the retraining programs have gone largely unnoticed.

While the president has proposed a $2.8 billion increase for job training over the next 10 years, Republicans’ budget proposals have suggested that federal funds for job training should be cut even further.

The USAID program is obviously at odds with the Obama administration’s stated intent to discourage outsourcing. Given all the other benefits and bailouts that this administration has already showered on Citibank and AIG, would it be too much to demand that the administration stop using our tax dollars to pay for these companies’ job training when they want to move more employment from the U.S.?

AIG / Citibank / Jobs crisis / Martin Column / Outsourcing - 04/25/2012

Bipartisanship for dummies

Ever notice how all the dysfunctional wrangling in D.C. stops the minute our politicians need to do the 1 percent’s bidding?

When it comes to taking away your rights as an investor, consumer or citizen, politicians who can’t seem to agree on anything else seem to work together fine.

The latest proof that “bipartisanship” is a cynical gimmick is the so-called JOBS act, passed by the House with bipartisan support and now under consideration by the Senate, with the blessing of President Obama.

In this case, the bill’s original Republican sponsors came up with the idea of packaging a collection of measures that would weaken investor and consumer protections by the acronym JOBS, which stands for Jumpstart Our Business Startups.

After all, who could be against JOBS? Most Democrats in the House were happy to sign on – only 23 voted against it. Even Democratic representatives Nancy Pelosi and Maxine Waters voted for it.

Maybe these politicians thought the JOBS branding and the bipartisan marketing would conceal what the bill really was – the latest of several disastrous bills dismantling sensible financial regulation.

The JOBS act is the ugly stepchild of the 1999 Gramm-Leach-Billey Act repealing the Depression-era Glass-Steagall Act, which kept banks from mingling federally-guaranteed banking activities from riskier activities, and the 2000 Commodities Futures Modernization Act, a Frankenstein bill that kept credit default swaps deregulated and led to the Enron scandal in 2001.

Both pieces of legislation contributed directly to the 2008 financial collapse.

In the case of the JOBS act, it would gut many of the accounting reforms contained in the Sarbanes-Oxley Act, which was passed in the wake of the Enron debacle. The JOBS act would exempt emerging companies worth up to $1 billion from disclosure, reporting and governance rules. It would allow such companies to operate for 5 years without regulatory oversight.

John Coffee, securities law professor at Columbia University Law School, says it could be more accurately described as the “boiler room legalization act” because it would allow companies to raise money from small investors on the Internet, without any regulatory supervision, evoking the small operations that sold dubious investments over the phone using high-pressure tactics.

Arthur Levitt, former head of the SEC, told San Francisco Chronicle columnist Kathleen Pender the bill was “a disgrace.”

In a scathingly sarcastic column in the New York Times, Pro Publica’s Jessie Eisenger wrote: “Nigeria shouldn’t be the only country to benefit from the Web. Right here in America, the elderly are increasingly attractive to a variety of entrepreneurial spirits. If JOBS becomes the law, such innovators could flourish.”

Barbara Roper, the Consumer Federation of America’s director of investment protection suggested that “Republicans cannot believe they have suckered the Democrats into taking up their idea that deregulation is the way to promote job growth.”

I don’t think the Democrats got suckered. I think they know exactly what they’re doing. President Obama has been struggling in his fundraising because Wall Street and the big-money donors have lost their enthusiasm for him this electoral cycle.

But he’s showing signs of bouncing back, after his campaign manager, Jim Messina, issued a pledge that the president would stop demonizing Wall Street. In February, the president went on a fundraising blitz, raising $45 million, up from $29 million the previous month.

But it’s still far less than the $56 million he raised during the same month in 2008, when he was fighting Hilary Clinton in a bruising primary campaign. The president and his party have to deliver for their funders, and the JOBS act is a perfect gift to show the big donors what they can expect for their generosity.

But they all must take us for a bunch of clods if they think we can’t tell the difference between a nasty attack on our rights and real jobs promotion.

Call your senator today and remind them you can’t be fooled by an acronym. Suggest you know how to spell jobs, and this awful piece of legislation doesn’t.

Congress / Derivatives / Jobs crisis / Martin Column / President Barack Obama - 03/20/2012

Nice recovery, if you can afford it

According to economists and the media, in June 2009 we came out of the deepest recession since the Great Depression and we’ve been on the upswing since. Unemployment’s down, with corporate profits recouping their losses from the recession and hitting new highs along with the stock market.

But it really continues to be a tale of two economies: one that works for the 1 percent and another, in which the 99 percent are increasingly falling behind.

For some striking evidence, look at the recent study by a prominent economist reported in the New York Times.

As the recovery took hold in 2010, UC Berkeley economist Emmanuel Saenz reported, the top 1 percent captured 93 percent of the income gains.

Top incomes grew 11.6 percent in 2010, while the incomes of the 99 percent increased only 0.2 percent. That tiny gain followed a drop of nearly 12 percent over the previous two years – the largest two-year drop since the Depression.

Other signs on the economic landscape also show the wreckage for those not protected by wealth.

Despite a dip in unemployment and the most the most recent more optimistic job creation numbers, the economy isn’t producing enough jobs on a sustained basis to permanently reduce unemployment. And many of the jobs that have been created pay severely reduced wages. Under the two-tiered wage systems increasingly favored by U.S. corporations, new blue-collar jobs pay start at a steeply lower hourly wage than they did in the past – $12 to $19 an hour as opposed to $21 to $32.

One in seven Americans are on food stamps, while high gas prices put the squeeze on low-income and working people alike. Meanwhile, foreclosures are on the rise in the wake of the state attorneys general announcement of a settlement over foreclosure fraud charges with the biggest banks, though the details of the settlement still haven’t been released.

The Occupy movement has put the great divide between the 1 percent and the 99 percent on the political map, forcing President Obama to acknowledge income inequality in his state of the union speech as the “defining issue” of our time, while the Republican’s front-running presidential candidate, Mitt Romney has dismissed such concerns as “envy.”

Obama’s concern about inequality has yet to translate itself into effective action, and it’s unclear, given the strong ties he’s had to the big banks and corporate titans, whether he’s capable of delivering.

Occupy, after delivering a much-needed jolt to the public discourse, likewise, has also yet to show that it can go beyond influencing the debate to actually winning gains for the 99 percent and reducing the widening inequality gap.

It’s no coincidence that income inequality has accelerated as large corporations have grown more influential in our political system through the clout of their cash, encouraging deregulation, tax cuts, trade deals and a host of other policies that benefit the 1 percent and disadvantage the rest of us. The fight against income inequality and for a more fair economy inevitably leads to the fight to rid our government of toxic corporate donations. Find out about WheresOurMoney’s constitutional amendment to undo Citizens United, the U.S. Supreme Court’s terrible decision that unleashes unlimited, anonymous corporate political donations, here.

Income inequality / Jobs crisis / Martin Column / Occupy - 03/09/2012