The Progressive Policy Institute proposes work bonus for low-income men

The Progressive's Policy Institute's Katie Campbell has a excellent idea to help lift low income males out of poverty by extending the Earned Income Tax Credit (EITC).

Memos to the Next President: A Work Bonus for Men
October 1st, 2008

Today, PPI released the second in a series of Memos to the Next President. In this memo, I argue that the next president should make social mobility a top priority by:

"announcing an ambitious organizing principle for a new round of progressive social initiatives: Never again will any American family with a full-time worker live in poverty."

The reformers of the 1990s brought us a bargain of mutual responsibility, one that made public assistance conditioned on work. This bargain worked and produced dramatic results. However, we focused on moving welfare recipients (mostly single mothers with children) to work. Now, we must add a new emphasis on the plight of poor men.

In this memo, I cite research that shows:

"Low-income men, especially minority men, have witnessed a two-decade trend of increased unemployment and decreased school enrollment. Some studies show that only 42 percent of working-age, poor men worked at all in 2005. Just 16 percent of this group reported working full-time year round, and only 6 percent of poor African-American men worked full-time."

In order to remedy this defect in the labor market, the next president should triple the Earned Income Tax Credit for non-custodial fathers and childless workers and once again, make work pay - this time for low-income men.

http://www.movingupusa.org/?p=70

Here are some more excerpts from the PPI Plan:

"The EITC is, quite simply, a work bonus. Its power to reduce poverty and reward work
without enlarging public bureaucracy has made it the policy of choice for today’s antipoverty warriors on both the left and right. Conservative hero Ronald Reagan called the tax credit “the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress.” Echoing that sentiment, President Clinton dramatically expanded the EITC in 1993 to make American social policy “put work first
Because our anti-poverty policies have been linked to parents with children, the
effects of programs such as the EITC have had very little effect on low-income men,
who generally do not have custody of children."

"Currently, the maximum federal EITC benefit is $4,536 for families with two or
more children, and $2,747 for families with one child. Low-income workers who do
not have children earn only $412—a much smaller benefit."

"In short, the EITC’s incentives are much less powerful for low-income fathers than for mothers. By making low-income men eligible for a more generous work credit, we
can move America closer to the progressive goal of making work pay for everyone. In
fact, evidence from work-support experiments suggests that an increase in the EITC
for single, childless workers, including noncustodial fathers, would not only lift more families out of poverty, but would increase the presence of low-income men in the labor market by at least 4 percent and as much as 20 percent."

http://www.ppionline.org/documents/ppi-eitc_memo.pdf

Dustin Ensinger: Free Trade positions derail McCain campaign in Michigan

Dustin Ensinger at Economy in Crisis www.economyincrisis.org reports today:

Sen. John McCain and his presidential campaign decided to pull out of Michigan on Thursday, ceding the state’s 17 electoral votes and shifting resources to more competitive Midwestern states like Ohio, Wisconsin and Pennsylvania. By pulling out of the state with arguably the nation’s poorest economy, McCain’s path to 270 electoral votes just got even more narrow.

Despite the fact that Michigan hasn’t voted for a Republican presidential candidate since George H. W. Bush in 1988, the McCain campaign had been doing relatively well in polls coming out of the traditionally blue state until the events of recent weeks brought America’s downtrodden economy into sharp focus.

One of the main reasons the campaign decided to pull out of Michigan is the fact that the economy has become the central front in the presidential race - an issue McCain has admitted is not his strong suit. Polling has consistently shown that more voters trust Sen. Barack Obama to handle the nation’s economic meltdown which has helped Obama open up a double-digit lead in the state..

The economic crisis is certainly taking its toll on the entire country, but nowhere is the failure of America’s economic policies more evident than in Michigan.

Nationally, unemployment is running at 6.1 percent, in Michigan it is over two percentage points higher at 8.9 percent - the nation’s highest unemployment rate. The auto industry, the backbone of Michigan’s economy, released a report Wednesday showing that auto sales had fallen to their lowest level in 15 years. In the past year alone, Michigan has lost 40,000 manufacturing jobs, according to the federal Bureau of Labor Statistics.

To many residents of the state, the blame for their economic woes can be placed squarely at the feet of “free trade” agreements and those who support them.

Obama, while a supporter of “free trade,” is not nearly the advocate that his opponent is. During the primary season Obama was extremely critical of the North American Free Trade Agreement, threatening to pull out of the agreement if the terms were not renegotiated.

“I would immediately call the president of Mexico, the president of Canada to try to amend NAFTA because I think that we can get labor agreements in that agreement right now. And it should reflect the basic principle that our trade agreements should not just be good for Wall Street, it should also be good for Main Street,” he said. However, his voting record shows that he has a mixed record on issues of “free trade,” voting for a bilateral deal with the nation of Oman and against the Central American Free Trade Agreement.

McCain may now be paying for his “unapologetic” support of disastrous “free trade” agreements like NAFTA. During primary season McCain told a Michigan crowd that “NAFTA was a good idea.” During another campaign stop he said “Free trade is vital to the future of America. Have people lost jobs? Yes, they have, and they’re going [to] lose jobs.” In another instance he told a group of Michigan voters that some of the jobs that have left the state are not coming back.

Since the implementation of the NAFTA in 1994, Michigan has lost 60,000 jobs as a direct result of the flawed trade deal, the Economic Policy Institute said. According to their calculations those jobs would have paid an average wage of $800 per week.

http://www.economyincrisis.org/articles/show/1877

African American Coalition endorses Amendment 2

The Northwest Florida Daily News www.nwfdailynews.com reports:

OKALOOSA ISLAND - A new coalition chose the NAACP's state convention to announce its support Thursday for passage of Florida's Marriage Protection Amendment.

It was a strange place for the announcement; the Florida State Conference of the National Association for the Advancement of Colored People had come out against Amendment 2.

"We are against Amendment 2 and our reason is the amendment would allow a way for discriminatory practices to be used," said Adori Obi Nweze, president of the state conference. "(The NAACP) has been around for 99 years fighting discrimination in this country. It makes no sense we still have to face it in these times."

Amendment 2 would make marriage between a man and woman the only "legal union" considered "valid or recognized" in Florida.

Nweze said the Marriage Protection Amendment, which will be on the Nov. 4 election ballot, was abominable in its discrimination against people in domestic partnerships.

However, Brenda Lewis with the Blacks for Marriage Coalition, which organized the news conference, disagreed.

"How dare anyone compare the struggles and beatings that African Americans endured in their fight for equality to homosexual struggles," Lewis said. "The comparison is far stretching and offensive to the many African Americans who lost their lives in our fight for equality. Gay rights are clearly not the same as civil rights."

Mary Esther Mayor Chuck Bolton, who spoke at the news conference, said the Mary Esther City Council voted unanimously to support the "Vote Yes on 2" movement.

"I'm offended when people say the effect of the amendment is to take rights away from anyone," Bolton said. "We've got to protect marriage the way it was designed centuries ago."

The Blacks for Marriage Coalition's news conference was held after a debate on Amendment 2 at the NAACP's convention. The debate was between John Stemberger, state chairman of Yes2Marriage.org, and Nadine Smith with the Fairness for All Families Campaign.

Stemberger said the passage of Amendment 2 would protect the institution of marriage. Smith countered that it takes away protections and benefits from people in all domestic partnerships, not just gays and lesbians.

About a dozen ministers and several residents attended the debate.

http://www.nwfdailynews.com/news/amendment_11621___article.html/marriage_conference.html

For information on Amendment 2 - www.yes2marriage.org

EPI: U.S. non-oil Trade Deficit Cost 5.6 Million Jobs in 2007

A report released today by the Economic Policy Institute [www.epi.org] connects the dots between a growing U.S. trade deficit and job losses for millions of Americans last year. And it isn't just a "Rust Belt" problem. States like California, Texas, Florida, North Carolina and Georgia were hard hit by trade-related job loss.

U.S. Non-oil Trade Deficit Cost 5.6 Million Jobs in 2007;
California, Michigan Among States Hardest Hit

WASHINGTON – While woes on Wall Street have riveted national attention, the
situation on Main Street continues to deteriorate. Even without considering the glut of foreign oil imports, the United States’ massive trade deficit with all of its trading partners resulted in the loss or displacement of 5.6 million jobs in 2007, according to a new report by the Economic Policy Institute (EPI).

The net job loss due to the U.S. non-oil trade deficit has been felt nationwide, displacing workers and weakening job growth in all 50 states and the District of Columbia. Leading the list in net job loss is California, which had 696,300 jobs lost or displaced in 2007, followed by Texas with 405,300, New York (326,100), Michigan (319,200), Ohio (303,800), Illinois (260,800), Florida (233,800), Pennsylvania (228,900), North Carolina (222,100) and Georgia (186,000).

Michigan took the biggest hit at 7.5 percent of total employment, followed by South
Carolina with 6.2 percent of total employment lost (121,100 jobs). Others in the top 10 include Alabama (5.9 percent, 117,700 jobs), Tennessee (5.8 percent, 161,400,), Ohio (5.6 percent, 303,800), Maine (5.9 percent, 34,500), Indiana (5.5 percent, 165,600), North Carolina (5.4 percent, 222,100), New Hampshire (5.2 percent, 34,000), and Kentucky (5.2 percent, 97,000).

“The turmoil on Wall Street can only compound the problems of an already weakening
job market,” said Robert E. Scott, EPI’s Director of International Programs and the
author of the report. “Our research shows no state or sector is exempt from the impact of non-oil U.S. trade deficits.”

While several factors contribute to the nation’s trade deficit, the most important causes “are the unfair trade practices of many U.S. trading partners, especially the distortion of exchange rates through the currency intervention policies of China and other Asian governments,” the report states. Ending currency manipulation by the Chinese government is essential in order to persuade Japan and other currency manipulators to end these practices as well, it concluded.

“The overall U.S. trade deficit has grown steadily for almost two decades, mainly
draining jobs in the manufacturing sectors,” Scott said. “Ending unfair trade practices can significantly improve the fundamentals of the domestic economy and help restore sustainable, broadly shared growth of jobs and income. “

The Economic Policy Institute (EPI) is an independent, nonprofit, nonpartisan think tank that researches the impact of economic trends and policies on working people in the United States and around the world. EPI's mission is to inform people and empower them to seek solutions that will ensure broadly shared prosperity and opportunity. In addition to the loss of jobs, “competition with artificially cheap imports has also put downward pressure on the wages of all U.S. workers,” the report concludes. Between 2000 and 2007, workers displaced from manufacturing—the sector hardest hit by U.S. non-oil trade deficits—are often forced to take jobs in sectors such as in home health care, accommodation and food service industries, where wages are typically much lower than in manufacturing. The average wages of those who secured re-employment were 11 percent to 13 percent lower than in their previous jobs.

The report notes that the dollar has lost substantial value, facilitating U.S. exports, but imports have skyrocketed because of unfair trade policies by other countries. The elimination of the U.S. non-oil trade deficit could support millions of new jobs in export industries, and contribute to the revitalization of U.S. manufacturing, it said. More than four million (70 percent) of the jobs displaced in 2007 were in the manufacturing sector. The automobile industry in Michigan was hit hard, along with computer and electronic components in such states as California, Texas, Oregon and Minnesota. Another hard-hit major industrial sector is textile, clothing and accessories, with job loss especially affecting the Carolinas, Tennessee, Kentucky and other southern states.

The accompanying tables show the state-by-state totals, both in numbers of jobs lost and as a share of total employment, due to the U.S. non-oil trade deficit. They can be viewed online at http://www.epi.org/content.cfm/bp222

Financial advisor warns against Wall Street bailout plan

Writing a guest column in the Seattle Post-Intelligencer seattlepi.nwsource.com, financial adviser Roger Tilton warns against bailing out Wall Street with taxpayer dollars.

No bailout money to Wall Street
By Roger H. Tilton
Guest Columnist

Last month I began my 20th year as a registered financial adviser at a large, well-known Wall Street investment bank. Now, only two such banks remain in the United States, and both recently morphed into bank "holding companies."

Exactly two weeks ago, I woke up in Seattle, where I started in this business, wondering if my firm still existed. I came here to meet with clients, a practice I started when I began my career, because I believe in face-to-face meetings.

Then, as now, I felt prospective clients deserved to get a look at me, to read my body language, to assess my skills and my knowledge of the investment world.

I wanted to teach what I could, to help new investors feel secure, to help them invest wisely enough to outperform inflation and taxes. Nothing exorbitant, just a safe, comfortable return consistent with their ability to tolerate risk, to tolerate market swings. A relationship and investment plan cemented with trust.

Even in rough times, and we've been through many, the fittest firms would always survive and the riskiest firms would fail. The markets react, adjust and move on.

The other night during a prime-time address, President Bush warned us that catastrophic consequences (another Great Depression) await if we don't do what he says and do it now. That sounds a lot to me like that "mushroom cloud" or "the sky is falling." Problem is, I don't believe him this time. Let's see if the sky really does fall. And if it does, we'll deal with it then, and know who to blame.

The Bush administration track record should not push us to support this bailout. Let's wait another month and let the voters decide which direction we should take.

Moreover, since I've worked on the inside on Wall Street for 19-plus years, I'm here to say, "Don't trust."

In fact, I'm here to scream: "DO NOT TRUST!"

Don't give bailout money to Wall Street! They (we) will only do what they (we) have always done. We'll say thanks for the money, and that this won't happen again. Then a few years (or months) from now, all will be forgotten and we'll remove the oversights, and guess what?

Same problem, only different derivatives, and much, much worse.

In real capitalism, institutions fail, survivors pick up the pieces. (Note Washington Mutual, Wachovia, Lehman Brothers and Merrill Lynch, all acquired by survivors.)

As for that $700 billion? If we as taxpayers really want to appropriate that much money, I say let's rebuild trust with the American consumer. Let's send $7,000 to each of the 100 million families affected by all these mortgages. Let's this time change course. Let's this time err on the side of the consumer, not the Wall Street institutions. Make the bad mortgages whole; absolve the consumer.

Let Wall Street figure out its own way out of its and Bush's mess. Congress, please do not offer a handout to the Bush administration, Treasury Secretary Henry Paulson and their Wall Street friends. They knew the risk; let them pay the consequences. Do not fall for their "trick" and "treat" them to a Halloween and Election Day "bailout."

http://seattlepi.nwsource.com/opinion/381362_tilton02.html

Contact your Congressman and urge them to oppose the Wall Street bailout.

(sample letter)

Dear Representative:
The people of this country have spoken. The bailout legislation has been defeated. They oppose the bankers' bailout. Backroom arm-twisting is an unacceptable hijacking of democracy. I will not accept any vote change in favor of the bailout.
Signed,

http://www.votenobailout.org/

Congressman Peter DeFazio proposes bailout alternative

John Sowell reports in The News-Review www.nrtoday.com:

U.S. Rep. Peter DeFazio offered up his own plan Tuesday to strengthen the nation’s financial system, a day after the House rejected President George W. Bush’s Wall Street bailout plan.

“We believe, having talked with regulatory experts, the former head of the Federal Deposit Insurance Corporation during the savings and loan crisis, a dozen economists, local bankers, that there is a low-cost, no-cost, lower-risk resolution of this problem,” said DeFazio, who voted against the administration plan and criticized pumping $700 billion into Wall Street fixes.

The DeFazio plan would incorporate several measures suggested last week by William Isaac, the former chairman of the Federal Deposit Insurance Corp. under President Ronald Reagan. Those measures, DeFazio said, would get at the root of the bank liquidity problem.

DeFazio was joined at a Washington press conference to announce the plan by seven other Democrats, six of whom had also voted against the administration bailout plan. The Senate is expected to vote tonight on a bailout plan, while the House reconvenes tomorrow to address the financial crisis.

The proposal would raise the limit from $100,000 to $250,000 on bank savings insured by the FDIC. That idea has been floated the last couple of days in several circles as a way to improve confidence in banks and urge customers from withdrawing their money.

It would also restore a program used during the savings and loan crisis during the 1980s to help banks and thrifts short on capital to obtain assistance. The institutions would receive certificates called net work certificates that could be carried on their books and provide short-term capital with no actual exchange of cash.

From 1982 to 1993, banks with a total of $40 billion in assets participated in the program, DeFazio said. Three-quarters were able to improve their financial situation with no further assistance, he said.

Participating banks would be subject to strict oversight by the FDIC, including scrutiny of pay for top executives and action against poor management. Financial records and business plans would also be subject to review.

The program would enable the federal Security & Exchange Commission to allow banks to list the value of mortgages they hold at a future value. Under the current system in place, because there is no meaningful market for mortgage-based securities, banks must value assets at “fire-sale” prices, DeFazio said.

That, in turn, creates a capital shortfall on paper, he said.

The plan would also place restrictions on two short-selling techniques. Under DeFazio’s proposal, the SEC would be required to implement a rule banning naked selling, selling a stock at a loss without first borrowing the shares or ensuring the shares can be borrowed.

Such practices can harm the companies represented in the sales and hurt their efforts to raise capital, DeFazio said.

“There is no economic value produced by naked short sales, but significant negative effects,” he said.

The plan would also block short sales without an uptick in the market. It extends a temporary SEC rule implemented Sept. 19 to protect the integrity of the securities market and strengthen investor confidence.

The rule prevents market crashes brought on by irrational short-term market behavior, DeFazio said.

Among those who joined DeFazio at the press conference were Democratic Reps. Elijah Cummings and Donna Edwards of Maryland, Mazie Hirono of Hawaii, Lloyd Doggett of Texas and Bobby Scott of Virginia. They signed on as co-sponsors and said the nation would be better served by taking the time to put together a carefully considered bill than to rush through with an expensive bailout plan under increasing criticism from economists.

The Service Employees International Union, which represents two million workers nationwide, endorsed the DeFazio proposal.

“We finally have a plan that will restore confidence in the financial markets without writing a blank check to the same Wall Street banks and CEOs who got us into this mess,” SEIU President Andy Stern said in a written statement. “This is an important, short-term solution that protects taxpayers and their savings accounts. To revive the economy over the long-term, we must address rising unemployment, stagnant wages, the health care crisis, and a tax system that is tilted in favor of the wealthy.”

http://www.nrtoday.com/article/20081001/NEWS/810019953/1063/NEWS&parentprofile=&title=DeFazio%20offers%20alternate%20Wall%20Street%20bill

Senator Mary Landrieu Votes 'No" on Financial Bailout

WASHINGTON -- United States Senator Mary L. Landrieu, D-La., released the following statement this evening after voting against the financial industry bailout package.

Sen. Landrieu said:

"Unfortunately, it appears that an influx of taxpayer money will ultimately need to be a part of any attempt to stabilize and restore faith in our financial sector. However, if the people of Louisiana have learned anything in the last several years, it is that simply throwing money at a disaster doesn't fix the problem unless paired with wise reforms to the practices that failed us.



"Significant improvements have certainly been made since the audacious first draft of the bailout plan. But in its current form, it falls too short of having the safeguards needed to ensure American taxpayers aren't left shouldering the burden of problems left uncorrected."