October 17, 2010
Wheeling Town Hall -- BIG Turnout -- Focus: Tax Breaks For Offshoring
-- by Dave Johnson
This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
Driving across Ohio toward Wheeling you pass one small manufacturing company after another - but not too many with lots of cars in the employee parking lot. I stopped in a coffee shop in a small township. They offered me a cookie, and when I declined, the owner said, “We’re giving them away, it’s our last day.” After 14 years the shop and the restaurant next door are closing because the landlord is giving up, auctioning off the building, and they don’t see how they can reopen somewhere else and make it. Too many manufacturers in the area have had to close.
Every manufacturing job supports four or five other jobs in the economy. This is seven or eight more gone. The Cut Nail plant dominates a section of Wheeling. It closed last week, after 152 years in business. That's a lot more gone.
The Town Hall
Friday night I attended the Wheeling, WV "Keep It Made In America" Town Hall meeting. This was a BIG event – 600 attendees big
Many elected officials, starting with Governor Joe Manchi (now running for Senate) attended and spoke. Quite a few candidates for Congress attended and spoke as well. And there was a panel. The Intelligencer / Wheeling News-Register has a great writeup of the event.
The meeting began with a flag entrance presented by an honor guard of Young Marines:
This was a big event with a lot of speakers, so I'll only put up snippets of what was said. But the entire town hall was webcast live: see the recording of it here.
Alliance for American Manufacturing Executive Direct Scott Paul gave "manufacturing facts" between each speaker.
"Why should people care about manufacturing if they don’t work in a factory?
* Manufacturing provides 70 of all r&d;, 90% of all patents, so if you care about innovation, next best thing…
* Manufacturing largest purchasers of technology, so if you care about…
* Manufacturing still employs 12 million, sizable portion.
* Also manufacturing has a multiplier effect, each job supports 4 or 5 others in your community. More than any other.
* Finally manufacturing jobs pay 22% better."
Vice President of the United Steelworkers Tom Conway spoke first,
"Thanks for coming, having a discussion, about what we think is a crucial issue, and one that America has been struggling with for a while. We’ve lost 50-60,000 factories over the last few years and millions of jobs. Labor and management do not have the luxury of not being together on this. We need to be together on this. Doing it jointly, telling a common story.Trade is good but trade needs to be balanced, but now for 30 years we have had an imbalance that has gone on and one, and you can’t do that and expect to have a thriving economy, and think the country is going to exist off the growth in the financial services sector. Now 40% of our GDP comes from the financial services sector and you've all seen what’s happened.
You’ve got to have an economy that is based on something. You can’t keep having your best and brightest go to wall street.
It used to be there were two tickets into the middle class, get a union card or get a college degree.
Governor, Senate candidate Joe Mansion:
First question is will you support buy America policies? Made in America, even better.There is not one thing in free trade that talks about fair trade. We can compete with any workforce in the world as long as it is on a level playing field.
Currency manipulation 40%, no rules or regulations on environment, and then we give tat incentives to companies to move jobs offshore.
Charlie Wilson OH-6, which borders on Wheeling:
We all have common interest, returing to economic security, returning our neighbors back to work and returning our communities to prosperity is a priority for all of us.We shouldn’t be looking to advance new trade deals if the ones we have aren’t working. I’m proud to be a co-sponsor of Repeal NAFTA. Trade is important but it has to be fair trade and we have not had fair trade.
We have been outsourcing jobs, crippling thing in our economy, voted 2 times in last few weeks to close tax loopholes that encourage companies to outsource. How can we possibly justify rewarding people with tax breaks who send our jobs to other countries. Come here I’ll show you what has happened to our economy from jobs lost to trade deals.
The Conservative Tax Pledge
One speaker said something I want to hilight: Mike Oliverio, Congressional Candidate, WV-1, said something about the "Norquist No New Taxes Pledge" that I think was significant. Oliverio called it a pledge to keep those tax incentives for closing factories and outsourcing jobs.
I support legislation that prevent outsourcing of jobs, these tax giveaways have to stop, my opponent signed a tax pledge to continue these giveaways to corporations. I just can’t imagine how you can sign that kind of pledge in today’s world.
His opponent David McKinley:
The stimulus failed, only added debt to the government. We’re driving business away by overtaxing and overregulating. National Association of Manufacturers, Chamber of Congress, Tea Party backs me, Right to Life back me.I want to freeze tax rates where they are now to remove uncertainty. Create confidence what our tax structure is going to look like they will start hiring again. Eliminate overregulation of business.
Nancy Pelosi is toxic to our political environment.
About 3-400 other candidates spoke. The Libertarian Party, the Mountain Party, the Constitution Party, others.
The Panel
After approx 28,245 more candidates spoke there was an excellent panel discussion, moderated by Scott Paul, with
* Tom Conway, VP USW
* Kenny Perdue, AFL-CIO West VA
* Beri Fox, CEO of the Marble King Company
Note: About Marble King. Wheeling and WV have been hit hard by imported glass. Glass used to be a very big industry in West Virginia. There were 240 glass manufacturing companies in WV 30 years ago. Marble King is one of only 6 remaining companies.
Berri – Marble King is a 75-year-old company. We want to help keep the American dream alive,. Glass business in WV second only to coal, 240 companies 30 years ago, today 6. The obstacles are substantial. Something has to be done.
We did kids’ toys, supplied game companies. All moved to China, NONE manufactured in US now. This created huge stresses on what was our market share, so we bagan to diversify our product into other areas, creative innovative. Now, you buy spray paint, aerosol, shake it, that sound is our marbles.
Question from audience: Tax Breaks for offshoring?
Conway - companies getting tax breaks are also the companies that have taken control of our government, big multinational companies, they leave American workers and communities behind and we can’t tolerate it any longer.
I think that is the best line to close with. If you need a reason to vote, there it is.
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-- Posted by Dave Johnson at 7:15 AM PST on October 17, 2010.
October 15, 2010
Lorain, OH Keep It Made In America Town Hall Meeting
-- by Dave Johnson
Thursday evening I attended the "Keep It Made In America" Town Hall in the John Spitzer Conference Center at Lorain County Community College, an impressive, large campus. Lorain, Ohio is another town with closed factories, boarded-up houses, high unemployment, and ringed by the national big-box vulture chains whose business model is to suck the remaining funds away to Wall Street.
Driving into Lorain
As you drive from town to town in Michigan and Ohio you see one after another a ring of the "big box" stores and national chain stores around each city. You also see the "brownfields" of rusted-out, closed factories, empty, falling-down buildings. Then you go to the downtown and you see boarded up houses, empty storefronts, deteriorating and deteriorated communities, idle people standing on corners. As you drive into these towns you can just see what is happening in a nutshell.
You used to hear about how Wal-Mart was predatory, how it would show up in an area and after a while the downtowns would dry up, local business-owners would go broke, local business employees would be laid off, and the local people would have to work for low wages at Wal-Mart, while the region's spending money would go off to the wealthy few who run these things.
Well a juicy story of devastation like that one gets around, and there are those who hear it and say, "Hey, that's a great idea, I wanna get me some of that." So the Wal-Mart business model has taken off and now there are any number of these vultures, ringing the cities and towns around the country, so often private-equity owned. They are draining away the lifeblood of the downtowns, fighting off the unions to keep wages down, even demanding tax breaks to move in and "create jobs." You see all the same stores circling every town now, running all of the local and regional businesses unto the ground.
Here are some pictures from the inner Lorain area but you see it all around: (click for large)
The Lorain Town Hall Meeting
As I said, the meeting was at Lorain County Community College. The turnout was good, a number of candidates, local officials, and people from the community.
The opening speaker was Congresswoman Betty Sutton. “Manufacturing is the backbone of our economy. It’s the backbone of our nation. We’re aware here in Northeast Ohio that it created and promises to support the idea of a middle class.”
Sutton talked about the bill passed recently by the house that confronts Chinese currency manipulation. She hopes the Senate will also pass this, but we all know how difficult it is to get anything through the Senate. She also said that unlike Wall Street shuffling paper money around, what creates real value is the manufacturing of goods, which supports four surrounding jobs in the economy for every manufacturing job.
Following the opening remarks Scott Paul of the Alliance for Ameican Manufacturing presented a number of facts about manufacturing in Ohio and the country. 624,700 people work in manufacturing in Ohio, down from 1,021,000 in 2000. 39% of Ohio's manufacturing jobs were lost in the last decade. For the country the last decade was the worst ever, worse than great depression. We lost 1/3 of all manufacturing jobs with 50,000 manufacturing facilities closed.
“When I grow up will there be jobs in America?”
Next came a panel, moderated by Scott Paul, with
- Larry Taylor, Plant Manager, US Steel Corp’s works in Lorain
- Dave MaCall, Director of District 1 for the United Steelworkers, USW in Ohio
- Kelly Zelesnik, Dean of engineering technologies at LCCC Elyria
A video of a question from a young person in Lorain: “When I grow up will there be jobs in America?” was asked of the panel.
MaCall: there will be jobs, because we have to take action, have to level the playing field. Things we need to do. Not be protectionists, have fair and balanced trade. But we need net exports. That’s how we grow. Every other country has a value-added tax so when someone makes a product that country writes a value-added check, so it is a subsidy on them and a tariff for us. America’s Visa card has run out.
We have 100 million tons of demand for steel in the US, has been for decades, last year demand was 60 million tons. Huge numbers of people laid off, from lack of demand, lack of consumption, and illegal trade.
Kelly, LCCC is partnering with manufacturing. LCCC invested in needs of community, 2 of 4 cornerstones of the college are education and economic development. LCCC is helping grow local economy with a new sensor center to develop and commercialize sensor technology. Industry and educational partners and entrepreneurs to access the center to develop and test prototypes and shorten the time to send products to the market as well as train employees. The center is an attractant to new businesses.
MaCall: We need national policies like every other country has. Businesses need to know there is a policy in America that will make sure there is access to capital, etc. For green startups, it is hard for companies to make investment when other countries helping their industry and we are not. Wall Street gets refinanced, now they’re holding it back, won’t let small businesses have access at reasonable rates.
Paul Q: What is the role in trade laws to keep steel competitive and on level playing field?
Taylor – We need strong trade policies that are strictly enforced. If they are not enforced they do no good, if we have this there will be jobs in future, level playing field. We stopped China on the steel tubes, but now other countries are producing subsidized product, we don’t get government subsidies, they do, we must have strong policies that we enforce.
Concluding
Over and over I am hearing these themes emerge: trade is good but stop illegal trade practices, level the playing field to enable us to compete, put together a national policy, improve trade education and training, invest in our future.
This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
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-- Posted by Dave Johnson at 8:24 PM PST on October 15, 2010.
Tonite's Wheeling WV Town Hall Will Be Webcast 5:15 EST
-- by Dave Johnson
I have just learned that tonite's "Keep It Made In America" Town Hall in Wheeling, West Virginia will be webcast live starting at 5:15PM EST.
Visit the Wheeling Town Hall - Live page for the webcast.
From their page:
With the election less than three weeks away, West Virginia Senate candidates will address the issue of creating jobs and reinvigorating manufacturing at a “Keep it Made in America” Town Hall Meeting in Wheeling, WV. More than 700 voters are expected at the Town Hall Meeting, which is part of a 10-state tour sponsored by the Alliance for American Manufacturing (AAM). The voters will have a chance to directly question candidates and elected officials - from West Virginia and Ohio - on such key issues as rebuilding U.S. manufacturing for the global economy and balancing trade with China.You can watch the town hall here live starting at 5:15pm ET today (Friday, Oct. 15th).
On Twitter? Follow us @KeepItMadeinUSA and use the Town Hall hashtag: #aamtht10
-- Posted by Dave Johnson at 2:05 PM PST on October 15, 2010.
October 14, 2010
Jackson Mich Keep It Made In America Town Hall -- An Energized Event
-- by Dave Johnson
Yesterday I was in Jackson Michigan to attend the 2010 "Keep it Made in America" Town Hall Tour meeting. It was a very well-attended event, and everyone I spoke with seemed energized because someone is out there talking about what they consider an important issue, and thought that manufacturing is vitally important to the country, for jobs, and so we can pay our bills.
Jackson
Jackson, for your information, makes a claim to be the city where the Republican Party was founded in 1854. One thing is for sure, it was a very, very, very different party then.
I last visited Jackson three years ago. The downtown was dreary, and I remember walking around trying to find a place to buy a sandwich, giving up and ending up at a dreary fast-food place outside of town. Like Flint, things appear to be changing. In Flint is has been public/private government/business partnerships that has helped revive the downtown and the area. The University of Michigan has opened a Flint campus right downtown and you can feel the difference. I'm moving fast on this road trip so I didn't have time to investigate what is behind the different feeling in Jackson. But I had trouble getting to flint because I kept passing all these highway construction zones with ARRA (stimulus) signs. The official U-3 unemployment rate is down to 12.8% from 15.2 earlier this year.
The Town Hall
The meeting was in the Commonwealth Community Center, downtown. The large room was full, approx 275-300 attendees. I asked around and things were getting started and people were getting seated and it was a diverse audience politically, including some Tea Party supporters. Everyone I spoke with seemed energized because someone is out there talking about what they consider an important issue, and thought that manufacturing is vitally important to the country, for jobs, and so we can pay our bills. A recent poll found that 74% of tea party supporters want government strategy for manufacturing
The format was speakers, a brief PowerPoint presentation, buffet dinner and a panel on manufacturing featuring local business, labor and others. Following is a brief summary trying to catch the essence of what some of the speakers said.
Jackson's Mayor Karen Dunigan gave a very short welcoming talk, saying “Every day politicians speak about jobs, and yet we are still losing jobs.”
Next, Lansing Michigan's Mayor and candidate for Governor Virg Bernero spoke, saying that when they say we are done with manufacturing, that it is a thing of the past, they are saying we are done with America being a great country. You can’t just have consumption, you have to make things. It isn’t gross domestic consumption, it is gross domestic product, with "product" being a key word.
Congressman Mark Schauer, MI-7, “Cash for Clunkers invested in auto industry, got our steel plant to reopen, 3 shifts of workers now here in Jackson, we need to do more of that, fight for jobs in Michigan,” and he had a debate in an hour gotta go. "We need to make decisions about educating our workforce, trade, make sure our dollars are not stimulating jobs in China… We were the arsenal of democracy, and China is spending twice what we are spending on renewable energy technology."
The Panel
From notes:
The Shop Rat Foundation offers hands-on skilled trade education to kids, creating the next generation of proud skilled workers and citizens (shop rats).
Rayl: The federal government needs to step up in this country and realize that the gloves are off on the global playing field, it’s not a playing field it’s a war field, they’re cleaning up, free trade is one thing fair trade is another. We need government to help us out, to fight these trade practices.
We need to be able to go out there and compete. We want ot do it. China has a big market for us when we can play fair but they hamstring us, one hand tied behind our back, Chinese government is fighting us all the time.
Scott: There may be difference between business and labor on a lot of issues but on American manufacturing there is very little disagreement, especially on holding China actable, R&D; tax credit, there is a lot of support for doing all of it.
Rayl: Manufacturing is not a Democrat or Republican issue, it’s an American issue, we can make anything you throw at us, we have great skilled workers out there, companies that want to keep those people in good paying jobs, give health care and all that stuff, but we can’t do it if we can’t compete on an even playing field.
Gaffney: A trade agreement that lets a company just pack up a factory and move it to another country just because wages are lower, leaving behind a devastated community and unemployment, is just bad policy.
As the country tries to get out of bad economic times hopefully the people in Washington figure out that manufacturing is the way to help. IF there aren’t good-paying jobs for people to go back to, what are we going to do?
Amanda:
Q) Filling a need, do you think what we have now with our high schools and Community Colleges is enough?
A) Definitely some great programs out there. Lot of great but definitely not enough, we’re trying to push, we need to focus on education more than we are. A lot of people don’t think it’s not worth the time to train a 6th grader, don’t think that far back, but I want to stress you've got to get them young, get them interested, without middle and high school programs going on anymore kids don’t know about trade skills, they’re afraid of tools, but get them doing that, they are more confident, they will go out get a job or go on to vocational schools.
Manufacturing In Michigan
I guess I don't have to tell you that Michigan is known for automobiles. But manufacturing in Michigan was wiped out in the 2000-2008 period. There were 897,100 people working in manufacturing in Michigan in 2000. There are 466,400 people working in manufacturing in Michigan now.
Other Jackson Town Hall Resources
MLive.com covered Virg Bernero speaking at the rally.
Steve Capozolla was live-blogging Jackson's town hall event last night.
A local radio station has posted some audio from the event here.
Details of the Keep It Made In America Town Hall Tour
And this: American Made Shopper had a display at the meeting. They only sell items that are Made In America.
This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
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-- Posted by Dave Johnson at 8:07 PM PST on October 14, 2010.
October 13, 2010
Flint, Michigan: A City Ahead Of The Rest Of Us
-- by Dave Johnson
This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
I am in Flint, Michigan today, getting ready to drive down to Jackson for this evening's "Keep It Made In America" Town Hall. Flint has been through it and has come out the other end. Now the rest of us are going through what Flint has been going through.
Many people know about Flint from the 1989 movie Roger & Me. In the documentary General Motors had closed factories in its home town, outsourced the jobs, and left the community behind. This sort of corporate behavior was becoming common by 1989 but it was still shocking that an American company would do this to Americans and America. The movie focused on the effect this had on Flint and its people. You might remember seeing block after block of boarded-up homes and people talking about how the try to get by.
This has now been a familiar story for decades, companies closing factories, outsourcing the jobs, abandoning the communities, a few at the top pocketing the money and leaving absolute devastation in their wake.
I was last in Flint three years ago, visiting relatives. Twenty years after the movie Flint was still struggling, in depression, its downtown full of closed stores and many of the blocks of boarded-up homes were worse, if anything. There were "For Sale" signs everywhere, and this was before the national housing bust. But there were many signs of people learning to cope. The Farmer's Market was going strong. The University of Michigan was working on a new campus, the Mott Foundation and others were working on various approaches to try to help the community...
So here I am again. You can see three years worth of progress here. Revival is clearly occurring. The new U of M Campus is open and clearly making a difference. Part of the downtown is clearly revived, including the Durant Hotel restoration, while other parts are under construction. The Farmer's Market was named one of the best in the nation. There are fewer "For Sales" signs around. All around there is a better mood. Crime is still bad, there are still abandoned buildings, but a corner is turned.
Flint Farmer's Market:
Flint Ahead Of Nation
So Flint has been through it and has come out the other end. Now the rest of us are going through what Flint has been going through. And the rest of the country has a ways to go before we will see the other end of this. Roger & Me was 1989 and now it is 2010. The same crap is still going on, and more so. As I said, in 1989 it was still shocking that American corporations would treat Americans and America the way they did. But now we have been through another two decades of the few at the top closing factories, outsourcing the jobs, devastating the communities, pocketing the money and then using their financial power to demand tax breaks to further defund government. The difference is that now we all live with the effects, not just Flint.
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-- Posted by Dave Johnson at 10:29 AM PST on October 13, 2010.
October 12, 2010
Reminder: I'm On The “Keep It Made In America” Town Hall Tour
-- by Dave Johnson
I am joining and writing about the "Keep It Made In America" Town Hall tour. (Click through for more info and a map.) The tour is from October 12-29 and I will be joining from October 13-19, starting tomorrow in Jackson, Michigan.
The official tour announcement:
Creating Jobs Takes Center Stage at "Keep it Made in America" Fall Tour Town Hall Meetings in 10 States Ask Political Candidates, "How Will You Create Manufacturing Jobs?" October 12th-29th WASHINGTON, DC. Oct. 4, 2010 - With the midterm election less than five weeks away and all polls showing the economy and jobs topping the list of voter concerns, the Alliance for American Manufacturing (AAM) has announced its 2010 "Keep it Made in America" Tour. The non-partisan group will hold Town Hall meetings in 10 states to help voters directly question their candidates and elected officials on such key issues as unbalanced trade with China and rebuilding U.S. manufacturing for the global economy. "A majority of likely voters say the U.S. no longer has the world's strongest economy and that Washington isn't doing enough to rebuild manufacturing," said AAM Executive Director Scott Paul. "People are greatly concerned about our lost standing. They know China is overtaking us, and they want the United States to be number one again. "We are providing voters with a chance to ask their candidates directly, 'What are you going to do about restoring manufacturing and the millions of jobs we've lost to China,'" Paul said. "We've invited the candidates. Let's see if they'll face the voters." The Town Hall meetings, which will include a panel of local business, labor, and civic leaders, as well as remarks by various federal and statewide elected officials and candidates, will focus on: · The need to create good jobs for the 21st Century; · The importance of fighting for manufacturing as the key to any economic recovery; and · Leveling the playing field for American workers and businesses in the global marketplace. "The voters get it," said Paul. "Will the candidates?"
Here is the tour schedule. I will be joining from Jackson, Michigan on October 13, through Canton, Ohio on October 19.
- Oct. 12: Hartford, Conn., 6 p.m.
- Oct. 13: Jackson, Mich., 5:30 p.m.
- Oct. 14: Lorain, Ohio, 5 p.m.
- Oct. 15: Wheeling, W.Va., 5 p.m.
- Oct. 18: Erie, Pa., 5:30 p.m.
- Oct. 19: Canton, Ohio, 5 p.m.
- Oct. 20: Wayne, Pa., 6 p.m.
- Oct. 20: Merrillville, Ind., 5 p.m.
- Oct. 21: Asheville, N.C., 5 p.m.
- Oct. 27: St. Louis, 5 p.m.
- Oct. 28: Concord, N.H., 6 p.m.
- Oct. 29: Wausau, Wis., 5 p.m.
Please come if you can! If you are going to be in one of those towns please come to the Town Hall. Please RSVP here.
-- Posted by Dave Johnson at 2:33 PM PST on October 12, 2010.
So Tired Of Corporations Ripping Me Off!
-- by Dave Johnson
So I'm traveling, in Detroit I have a car reserved from Dollar rental car. I get there, they have an SUV for me, which I don't want, I requested a small, economy car, so half an hour at the counter to get everything changed, and then there is a big fee if my wife drives, too.
I chose Dollar because it cost less and I have an "Express" membership. I finally drive drive out long after everyone else, paying a price much higher than anyone else would have charged. And no recourse.
The usual.
-- Posted by Dave Johnson at 2:26 PM PST on October 12, 2010.
October 10, 2010
How Tax Cuts For The Rich Made Corporations Predatory
-- by Dave Johnson
This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
America used to have a top tax rate of around 90%. This meant that after a person earned a lot of money in a year, additional income beyond that amount was taxed at the higher rate. Back then government worked a lot better. We didn't have deficits, the schools and public universities were better, there were enough police and firefighters, the courts were not overwhelmed, even the IRS was better. Most important, our country's infrastructure -- the soil in which business thrives -- was kept in good shape so the country was more competitive and livable. And all of this meant that the very people who were paying those top rates benefited because their businesses did better.
Government and the services it provides aren't all that has changed for the worse since we cut tax rates for the very, very rich. It caused the relationship between big businesses and the rest of us to deteriorate, too. Here is why.
When top tax rates were high it took time to build up a fortune. So businesses had to depend on the health of the communities around them to help keep them growing over a long period. They had to plan and act long-term. Businesspeople had to carefully build up solid businesses that served their customers and kept them coming back. And they had to train and hold on to employees because their experience was needed.
After the top tax rates were lowered people could reap huge fortunes in a hurry. This changed everything. It created incentives for people to do things that we can now see have harmed our country. Quick-buck schemes for short-term profit became the business model. It made more sense to run up high debt, cut for very high short-term profit or just sell off businesses rather than invest and build build carefully for the long term. Cost-cutting was the name of the game. So cutting R&D; and training and quality and support, closing factories and outsourcing jobs made more sense than investing in new equipment and training & retaining a good workforce. Managers who held to the old-fashioned serve-the-customer and support-the-community model faced the private equity buyout -- where companies become buy-and-sell commodities with workers, customers and the country as costs.
So big corporations became predatory, caring little for customers, communities and country because executives planned to get rich quick and leave soon. Businesses’ interdependence with the community went out the window. It made more sense to fleece the community with quick-buck schemes than to rely on its well-being over a long period of time. Short-thinking business models that cut employees to the bone and took advantage of customers began to make sense. Then, as communities fell apart, those few who benefited from such business practices could just fly away in their private jets or sail away in their yachts. The greater community was no longer of any use to them except as a crop to be harvested.
Bring Back The 90% Top Tax Rate
So it is time to change the formula. It's time to bring back the 90% top tax rates. We can use the money to start paying off our debt. It is time to rein in our businesses and make them part of our communities again. The way to do this is to continue to help people become wealthy – just a bit more slowly, please, and bring us all along. Bring back the top tax rates of America's golden years so we can all enjoy the benefits of our economy again.
A top rate of 90%, phased in as income gets higher and higher, wouldn't raise taxes at all for most of the people in the country but it would mean that the top 15 hedge fund managers would only take home an average of about $100 million a year. While bringing in only $100 million a year might be a terrible hardship for them, it brings up an important question for the rest of us: how much is enough? Especially when a few having so much means that the rest of us have much, much less and live in communities that are much, much worse off than they used to be.
See also Tax Cuts Are Theft.
And see Tax Cuts Are Theft: An Amplification by Sara Robinson.
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-- Posted by Dave Johnson at 10:39 PM PST on October 10, 2010.
The Foreclosure Paperwork Mess
-- by Dave Johnson
You might be starting to read about the big mess with foreclosures and the paperwork.
During the bubble so many mortgages were given out and then resold to investors, and it was all happening so fast, that the paperwork was not looked at very closely. See this explanation. The result is that it might be clear that you have a mortgage and ought to be making payments, but it is in no way clear who owns that mortgage and who you should be paying, and who should be foreclosing on you if you are not.
That is the root of the huge problem that is opening up right now. It is becoming very clear that the paperwork on many of these mortgages was not done correctly, and sometimes was even done fraudulently. If an investor bought a mortgage or package of mortgages, like a CDO, it was with an assurance that the paperwork was correct. So now that investor has recourse they they might not have had before and might be able to go back to whoever sold them the toxic assets and demand their money back.
The implications:
* People who have been paying mortgages might have been giving money to the wrong people. One investor has been getting extra payments while the correct investor was getting no payments. Now they are all going to have to sort that out and get the money to the correct people.
* Banks sold these packages of mortgages with assurances that the paperwork was correct and will now be on the hook to buy them back.
* Those banks might not have the means to buy them back.
We might be heading for a second round of the really big banks being insolvent again.
-- Posted by Dave Johnson at 5:03 PM PST on October 10, 2010.
The Great American Credit Catastrophe
-- by Michelle Kraus
The 911 of the Middle Class is the consumer credit debacle. It is the gift that keeps on giving. The reality is that the housing crisis is just one piece of this really big, ugly mess. It seems to me that our President MUST call for immediate reform and take action through executive order. Call me politically naïve, but we need action. Unemployment continues to hover close to 10%, and higher in badly hit areas. Interest paid by the banks on savings ranges from less than 1% to maybe 2.5% on a good day. The consumer credit card companies, though regulated now sort of, ran naked through the streets jacking up everyone's interest rates to over 15 to 30%. Yes they have to notify the poor, irresponsible slobs now before they do things, but the banks still get to burn kerosene in the town square with no permits. And we haven't even gotten to the health insurance yahoos that have four more years for their trickery. Oh Nelly, bar the door! It's the Wild West again as the cattle are corralled - only this time it's the American people being herded to ruin by the giddy-up bankers and health insurance companies, not just the mortgage guys.
People are getting sick from worry. Their backs hurt, their necks are out, and they are grinding their pearly whites. Few sleep well at night. Pharmaceutical sales are up. The banks we saved are savaging us. They are bulldozing the Middle Class under mountains of debt. People are losing their homes, divorces are up, businesses are closing, and unemployment is rampant. The consumer credit world and their FICO scores are broken. They are based on a world that no longer exists. In two short years, many consumers have watched their scores collapse under an avalanche of debt. The FICO scores were calibrated for a different time when consumer credit cards were not the only source of money available, mortgages were not under water, and unemployment was not soaring. If we are ever to unwind this situation, these algorithms must be reset. Otherwise the banks will never lend again. The Middle Class needs a do-over, just like the banks got.
Yes sir, Obama stood up against the broad sweeping foreclosure legislation, and Bank of America seized the moment halting foreclosures nationwide. But we're all holding our breath waiting for the other shoe to fall as even Progressive strategist Mike Lux gens up the netroots to re-engage with the President and Congress. It is inconceivable that people have not taken to streets in protest over their lost pensions, and the absence of any kind of interest bearing bank account -- except on consumer credit cards. In fact, this week Robert Sheer wrote brilliantly about Obama's "No Banker Left Behind" -- while every normal person has been thrown under the bank bus. How did we allow the bail-out of every financial institution, while abandoning the common folk? Why are Democrats -- whether conservative, moderate or netroots - not able to channel this collective anger, rage and disappointment other than to take aim at one another? Given the data, there is no way out for the once resilient Middle Class without a do-over. Instead of "No Banker Left Behind" let us heal the Middle Class by fixing the credit industry; restricting the health care industry now, not in four years; and making those banks lend the money we gave them and not hide behind FICO scores. All of the Democrats are writing, but no one is demanding change now. The Tea Party has successfully harnessed the anger and rage, but has no plan. Frankly, they are just another distraction taking our attention away from the gravity of the problems.
Mr. President, come back to us as Mike Lux laments. We need you. We, in the Middle Class, are living this nightmare everyday of our lives. Figure it out, and get the Middle Class out from under. The numbers do not lie. This is our emergency, our call to action, our 911. Friends and neighbors are collapsing from the stress when they can ill afford it. Unemployment is not going away. Consumer debt is skyrocketing. Mr. Obama, Americans are not being frivolous and irresponsible as Dr. Summers would like you to believe. They are boxed in with no escape hatch. Consider enacting a nationwide job core like the WPA, putting the banks on real notice, corralling those nasty health insurance folks, redoing the credit industry, and loosening up cash. No one is sleeping at night. People are nervous and cannot see a future.
Please, inspire us again, show emotion, get messy, and let the wrinkles show. Mr. President raise your voice in outrage. Give us voice. Come back to us. The time is now.
This was originally published on the Huffington Post earlier today.
See the pearltree below for the references for this article.
-- Posted by Michelle Kraus at 2:22 PM PST on October 10, 2010.
