The Wire

Record level income inequality

Today's New York Times editorial page restates some of the obvious...but with a stark comparison that demonstrates just how bad a situation middle-class Americans find themselves in due, in large part, to poor public policy.  "Not since the Roaring Twenties have the rich been so much richer than everyone else. In 2005, the latest year for which figures are available, the top 1 percent of Americans - whose average income was $1.1 million a year - received 21.8 percent of the nation's income, their largest share since 1929."  Read on...

Posted by Web Team on Wednesday, April 04 | 3600 comments | Permalink

House Democrats showing strong party unity during first three months in power

House Democrats are showing enormous party unity.  After 12 years of legislation that hurt the middle class, this Democratic unity has produced very strong agenda for middle class Americans.  CQPolitics.com released the report on the votes earlier this week.  Early indications are that most Democrats have been fulfilling the wishes of their constituents through their voting:

There are nine members newly elected last fall who rang up party unity scores of 100 percent. But all of these members represent strongly Democratic-leaning districts, with the exception of Ciro D. Rodriguez of Texas’ politically competitive 23rd District in and around San Antonio.

By contrast, the six Democratic freshmen with the lowest party unity scores all represent districts that Bush won in 2004 and are likely to face tough fights in their efforts to hold their seats in the 2008 elections.

They are Jason Altmire of Pennsylvania’s 4th (88 percent party unity score); Christopher Carney of Pennsylvania’s 10th District (91 percent); Brad Ellsworth of Indiana’s 8th District (91 percent); Heath Shuler of North Carolina’s 11th District (92 percent); Joe Donnelly of Indiana’s 2nd District (93 percent); and Baron P. Hill of Indiana’s 9th District (93 percent).

Ellsworth, Shuler, Donnelly and Hill were among the 12 Democrats who voted last week against the Democratic-written fiscal 2008 budget resolution, which passed anyway.

Hill is considered a freshman for the purposes of this story even though he previously served in the House from 1999 through 2004, losing his seat in the latter year, then staged a successful comeback bid in 2006. The same applies to Texas’ Rodriguez, who was first elected in a 1997 special election, lost his seat in 2004 but was returned to Congress (in a different district) in 2006.

Among the 233 House Democrats, the lowest overall party unity score in this year’s first quarter was registered by Mississippi Rep. Gene Taylor (81 percent), long considered among the most conservative and contrarian members of the Democratic caucus.

So far, it appears that most members are voting their districts.  But, it's still early and many of the most contentious votes await.   We're going to keep watching. 

Posted by Staff on Wednesday, April 04 | 3123 comments | Permalink

Drug companies: $155 million to lobby, 1,100 lobbyists, $19 million in political contributions

The Pharmaceutical industry is putting its vast resources to work in Washington.  A new report shows the money and manpower being utilized to prevent legislation that can make drugs more affordable.  They're interests are not in the interests of making health care more affordable: 

Drug makers spent $155 million lobbying the federal government from 2005 to mid-2006, setting a record that they could outdo this year as Congress considers high-stakes legislation for the industry and consumers, said a public interest group in a report Monday.

Researchers at the nonpartisan Center for Public Integrity said that the drug industry spent nearly $111 million on lobbying in 2005, a record for the sector in any one year. The record pace appeared to be sustained in the first half of 2006, the report said.

Pharmaceutical industry officials said the report distorts the industry's role in Washington, which they say is primarily educational and scientific. Industry spending is designed to ensure that new drugs for intractable illnesses get government approval to be marketed, they said.

"The Center for Public Integrity's report, not surprisingly, misses the mark when it comes to efforts by America's pharmaceutical research companies to educate policy-makers," said Ken Johnson, senior vice president at the Pharmaceutical Research and Manufacturers of America. "Our priority has always been to help advance patient health and we have supported policies and programs that bolster patient access to safe and effective medicines."

Lobbying is only one facet of the industry's influence. Drug company sources also accounted for more than $19 million in political contributions to candidates in last year's congressional elections, mainly to Republicans.

The industry's lobbying budget enabled drug makers to field about 1,100 agents to influence congressional committees and administration offices in each of the last two years.

The industry achieved several of its major objectives, the report added, including upholding the government's ban on imports of lower-cost medications from abroad.

Posted by Staff on Tuesday, April 03 | 2625 comments | Permalink

Did lack of regulation led to subprime market implosion?

At TPM Cafe, Elizabeth Warren thinks lack of regulation played a role in the subprime mortgage crisis.  She wrote earlier this week about that crisis -- and the lack of regulation that precipitated it: 

Now that the subprime market is imploding, it seems that better regulation a few years ago would have saved us. Even market stalwarts such as Larry Summers concede that the market didn't provide enough discipline to prevent lenders from pushing lousing loans. But the no-regulation crowd isn't giving up. Summers, for example, says that the answer to the current crisis is not to regulate because that's just the generals fighting the last war.

A regulatory moment comes around rarely, but one is nearly upon us. Senator Dodd and Congressman Frank are pushing hard on the lack of regulatory oversight of subprime lending, and folks on both sides of the aisle are beginning to ask the regulators and business people some tough questions.

But the no-regulation crowd hasn't given up. They want non-regulation in response to the crisis precipitated by non-regulation.

SNIP

A significant part of the problem in the subprime market is not simply that too many dollars were put into the hands of working families and people with bad credit. The problem is that too many exploding products--products that were designed from the beginning to become unaffordable--were sold around the country. Smarter, more effective regulation can help us avoid repeating that mistake.

Congress is working on a fix to this problem.  Predatory lending and an unregulated market have resulted in financial ruin for many middle class families. 

Posted by Staff on Thursday, March 29 | 3365 comments | Permalink

Democrats offer labor and environmental conditions for fast track authority

The Hill reports that Democrats have issued their demands for the new fast-track authorization 

House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) yesterday unveiled a set of conditions he said must be met before the administration’s trade agenda in the Democratic Congress moves forward.

Rangel presented the wide-ranging policy, which covered everything from labor rights to port security, at a noon meeting of the Democratic Caucus where the points won an endorsement, he said. Rangel previously shared such policy details in separate meetings on March 23 and Monday with House Speaker Nancy Pelosi (D-Calif.).

Following the caucus meeting, Rangel presented his ideas to U.S. Trade Representative Susan Schwab and Treasury Secretary Henry Paulson, as well as to top Ways and Means Republicans, with a simple message.

 “All we have said was that we have won the election. We are in the majority. It just makes sense that we should not have to beg for consideration of things that we think would be good for trade and good for America,” Rangel told reporters.

Rangel’s presentation reflects the broader challenges the administration now faces on trade. In the last Congress, former Ways and Means Chairman Bill Thomas (R-Calif.) did not include Democrats in the crafting of trade legislation. While Democratic demands on labor and the environment were raised at committee hearings and markups, such concerns generally were pushed aside.

The proposed changes, which appear to have the support of freshmen Democrats who have been outspoken critics of free trade, address labor and environmental issues:

On labor, the deals would have to require that countries adopt, maintain and enforce basic International Labor Organization (ILO) standards. Currently, the three deals only require countries to enforce their own labor laws, which may or may not reflect ILO criteria.

On the environment, parties would have to implement and enforce common multilateral environmental agreements such as the Convention on International Trade in Endangered Species (CITES). Environmental groups have called this stipulation particularly critical with regard to the Peru FTA because of the trade of mahogany, an endangered tree species that the Sierra Club and other groups say is exported from Peru in violation of CITES.  

The Democrats aren't begging.  They're telling. 

Posted by Staff on Wednesday, March 28 | 259 comments | Permalink

Wash. Post:  Republicans “May Have to Swallow Tough Labor Terms for Trade Deals”

Swallow tough labor terms?  Labor issues have been ignored by the Bush Administration and its GOP allies in trade deals.  The times have changed.  It's looking more and more like new "fast-track" authority is going to need stronger protections for workers:

As the Bush administration this week pursues a breakthrough with Democratic leaders aimed at gaining congressional approval for new trade agreements, the fate of the deals appears to hinge on whether Republicans are willing to accept tough labor conditions that they assert could boost the power of unions in the United States.

The Bush administration needs congressional blessings for recent trade deals with Peru, Colombia and Panama, as well as another pact still being hammered out with South Korea. The administration is also seeking the extension of the president's fast-track authority -- the right to negotiate trade deals, then submit them to Congress for a simple up-or-down vote without amendments. That power expires at the end of June.

Democrats assert that recent pacts such as the Central American Free Trade Agreement have encouraged the shift of factory work to poor countries where labor is cheap because laborers are exploited. These agreements have mandated only that American Trade partners enforce their own laws, even if those laws are weak. House leaders have demanded that new deals include the core principles of the International Labor Organization, a U.N. body in Switzerland that seeks to improve the lot of workers.

The group's principles prohibit forced and child labor, while requiring that workers be allowed to form unions. Some Republicans and business groups have argued that unions could use the standards as a way to increase their power in the United States, wielding the force of international treaty to mandate changes in American law.

Prohibiting forced and child labor and letting workers form unions.  That's going to be tough to "swallow."  

Posted by Staff on Tuesday, March 27 | 1897 comments | Permalink

American public opinion shows shift towards progressive policies

In Paul Krugman's column in today's NY Times, he takes a look at poll numbers that show why the Republican Party is losing support among the electorate.  Obviously, these profound shift present an opportunity for elected officials who are actually willing to take positions supported by the American people:

Consider, for example, the question of whether the government should provide fewer services in order to cut spending, or provide more services even if this requires higher spending. According to the American National Election Studies, in 1994, the year the Republicans began their 12-year control of Congress, those who favored smaller government had the edge, by 36 to 27. By 2004, however, those in favor of bigger government had a 43-to-20 lead.

And public opinion seems to have taken a particularly strong turn in favor of universal health care. Gallup reports that 69 percent of the public believes that “it is the responsibility of the federal government to make sure all Americans have health care coverage,” up from 59 percent in 2000.

The main force driving this shift to the left is probably rising income inequality. According to Pew, there has recently been a sharp increase in the percentage of Americans who agree with the statement that “the rich get richer while the poor get poorer.” Interestingly, the big increase in disgruntlement over rising inequality has come among the relatively well off — those making more than $75,000 a year.

Something is not working for the American people.  That's because members of Congress haven't been working for their constituents.  That has to change. 

Posted by Staff on Monday, March 26 | 185 comments | Permalink

The Bush “Ownership Society” campaign slogan meets the reality of suburban blight

Earlier this week, Bloomberg noted that George Bush's domestic policy revolved around the "ownership society."  That's the spin.  The reality is, of course far different:

President George W. Bush spent years promoting an ``ownership society,'' the idea that Americans should own everything from homes to the assets needed to pay for their own health care and retirement. Now the weakening U.S. economy is exposing the dark side of that dream.

The president's sales pitch for the ownership concept is being dialed back as housing prices fall, foreclosures reach record levels and U.S. stock markets shed more than $700 billion in market value over the past month. Bush, who mentioned the term three dozen times in 2004, has mentioned it only once this year.

The ownership concept was the glue that bound together Bush's domestic agenda. While the president remains committed to the idea that giving individuals more of a stake in society reduces their reliance on paternalistic government, it's a tough sell when people are fearful that their finances may be eroding.

That dialing back affects real people.  Today, the New York Times reports that suburbs across America are fighting the blight caused by the surge in foreclosures, which does not make for a vibrant "ownership society":

Cuyahoga County, including Cleveland and 58 suburbs, has one of the country’s highest foreclosure rates, and officials say the worst is yet to come. In 1995, the county had 2,500 foreclosures; last year there were 15,000. Officials blame the weak economy and housing market and a rash of subprime loans for the high numbers, and the unusual prevalence of vacant houses.

Foreclosures in Cleveland’s inner ring of suburbs, while still low compared with those in Cleveland itself, have climbed sharply, especially in lower-income neighborhoods that border the city. Hundreds of houses are vacant because they are caught in legal limbo, have been abandoned by distant banks or the owners cannot find buyers.

The suburbs here are among the best organized in their counterattack, experts say, but many suburbs elsewhere in the country have had jumps in foreclosures and are also working to stem the damage.

Outside Atlanta, Gwinnett and DeKalb Counties have mounted antiforeclosure campaigns while several towns south of Chicago are forcing titleholders to fix up empty houses, or repay the government for doing it.

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Posted by Staff on Friday, March 23 | 5582 comments | Permalink