Economy & Budget

The message of Massachusetts: Jobs.

Bill Clinton saw it clearly when he was running for President against Bush I. It became his mantra: “It’s the economy, stupid.”

Clinton wanted to reform health insurance too. But he understood that during a recession, the first priority is jobs.

Politicians and commentators continue to blather obtusely about the meaning of Massachusetts Senate candidate Martha Coakley’s loss to a Republican in a heavily Democratic state. Like Coakley and her advisors, they’ve failed to see the obvious, failed to learn from Clinton’s victory: 

It’s the economy, stupid.

Poll results show that Massachusetts voters punished Coakley – and Democrats -- for neglecting the issue most vital to them: jobs. If politicians had studied earlier polls or attempted to actually get in touch with mainstream, Main Street Americans, or just listened to AFL-CIO President Richard Trumka’s Jan. 11 address at the Washington Press Club, they’d have known to focus on jobs. The message of Massachusetts should be clear: If Democrats want to save their own jobs in the mid-term elections this fall, they must create jobs now. 

A poll taken as far back as the first week in December exposed voters’ anger over the economy. The bipartisan Battleground Poll showed this: A huge majority of those surveyed ranked improving the economy and jobs as the most important tasks for Congress. It was 40 percent, compared to healthcare reform, at just 15 percent.

Here’s what pollster Celinda Lake said about the results:

“The number one thing Democrats have to do is prove they really have a jobs program and an economic program that is going to sell on Main Street.” 

That was a month before the Massachusetts vote. In the meantime, the U.S. Bureau of Labor Statistics announced unemployment numbers for December – and they were worse in 43 states than they had been in November. Joblessness in Michigan, a high population heartland state, was the highest in the country at 14.6 percent. Only the rates in two other states, Rhode Island – 12.9 percent -- and South Carolina -- 12.6 percent, beat that in one of the dozen largest economies in the world – California. There it was 12.4, significantly higher than the U.S. average of 10 percent. 

People are hurting. Pay attention, politicians. Pay attention. 

They didn’t. In the Massachusetts race, they were talking about terrorism and baseball.

In a Research 2000 poll done for MoveOn.org, 95 percent of Massachusetts residents surveyed ranked the economy as either important or very important to their candidate choice. Research 2000 questioned 1,000 registered voters – half of whom voted for Republican Scott Brown and half of whom did not vote at all. 

Among those who voted for Obama in 2008 but Brown in 2010, 51 percent said they believed Democratic policies helped Wall Street more than Main Street. 

It’s the economy, stupid. The Main Street economy.

Similary, in a Hart Research Associates poll conducted on election night in Massachusetts, 79 percent of voters said electing a candidate who would strengthen the economy and create more good jobs was the single most important factor in their decision. The most crucial quality for a candidate, they said: Someone who would fix the economy. 

The Bush II Great Recession is more than two years old now. Workers are frightened and angry. They see bailouts for Wall Street, big bonuses for bankers and unemployment continuing to rise. 

They will vent their frustration on politicians. Massachusetts showed it. Trumka warned about it earlier this month in his talk at the Press Club:

“At this moment, the voices of America’s working women and men must be heard in Washington – not the voices of bankers and speculators for whom it always seems to be the best of times, but the voices of those for whom the New Year brings pink slips and givebacks, hollowed-out health care, foreclosures and pension freezes – the roll call of an economy that long ago stopped working for most of us.”

He went on: “Working people want an American economy that works for them – that creates good jobs, where wealth is fairly shared. . .”

He recommended immediate implementation of the AFL-CIO’s five-point jobs creation program – a plan that would produce 4 million jobs and includes dramatically increasing federal infrastructure and green jobs investments and direct lending of the refunded bank bailout money to small and medium sized businesses that can’t get credit because of the financial crisis. 

Just as important is implementation of the recommendations in the Framework for Revitalizing American Manufacturing report issued by the White House manufacturing task force in December. That report contains concrete measures to revive manufacturing in the U.S. to generate real wealth, not the illusory paper assets counterfeited on Wall Street. 

Trumka called for immediate action, not going slow, not taking half steps. Those who seek delay are “harming millions of unemployed Americans and their families,” he said, and jeopardizing economic recovery.

He ended with this warning:

“The reality is that when unemployment is 10 percent and rising, working people will not stand for tokenism. We will not vote for politicians who think they can push a few crumbs our way and then continue the failed economic policies of the last 30 years.”

Workers executed that warning in Massachusetts. 

What Americans want is jobs.  

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Ending my 'abusive relationship' (Rep. Jan Schakowsky)

I am happy to report that I have taken the first very important steps in ending the abusive relationship I am in. That's right. I am breaking up - with my "too big to fail" bank.

Bank of America, bye-bye. It started out innocently enough. When I first started banking as a young woman, I went to the Norshore National Bank, a friendly community bank in my neighborhood. And then it was bought by a bigger bank, and then by a bigger bank, and then by LaSalle Bank, a large but esteemed institution in the Chicago area, and finally by Bank of America. The transitions were pretty smooth, and frankly, I admit I took the easy way out and stayed put.

Hello, Devon Bank! Yesterday I went to the bank that my parents patronized for many happy years. It's in the neighborhood I grew up in, near my house, in my district. The friendly bankers were happy to see me and helped me open a new checking account. I can still bank on line, get a debit card, and use without charge a network of ATMs that are conveniently located. They gave me a map that I'll keep in my car. Not only that, they will pay me 4.15% interest on my balance up to $20,000 and they gave me a very nice pen set and a clock!

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The Big Question: What should Obama do next on the economy?

Some of the nation's top political commentators, legislators and intellectuals offer their insight into the biggest question burning up the blogosphere today .

Today's question:

What should President Barack Obama's strategy be to improve the economy before the midterm elections? Will the president be able to achieve those goals with Congress?

(Read today's responses after the jump.)

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Financial crisis fee punishes those who acted responsibly

In announcing his plan to impose a “Financial Crisis Responsibility Fee” last week, President Obama said he was seeking to get back “every dime” that was owed to the taxpayers.

That’s a laudable goal. Ensuring the taxpayers are paid back the funds they lent to flailing and failing financial institutions through the Troubled Asset Relief Program should be a priority. However, the president’s plan wouldn’t do that.

Created in the wake of the financial meltdown of September 2008, the Troubled Asset Relief Program, or TARP, provided federal dollars to help stabilize financial institutions whose collapse, in the opinion of the Treasury at the time, may have significantly worsened the economic crisis.

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Congress must create Consumer Financial Protection Agency

We all read the reports this past week of excessive executive compensation for banks. It’s hard to imagine that just as our economy starts to regain its financial footing after the worst economic collapse since the Great Depression, the big banks that helped ignite this crisis are giving big bonuses to executives for a job well done.

Why are banking executives being rewarded for irresponsible financial decisions? And, when is enough, well, enough?

On Friday Consumers Union, the nonprofit publisher of Consumer Reports magazine, again called on Congress to enact the proposed Consumer Financial Protection Agency (CFPA) so that the financial collapse of the last two years never happens again. If passed, the CFPA would protect consumers from abusive, unsafe, and deceptive credit and payment products and services. It would require that all financial disclosures be fair, transparent and easy to understand.

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Eliminate transaction fee on Haiti donations (Rep. Markey)

I am continually staggered by the sheer, selfless generosity of the American people.

Every day we are confronted with examples of average people struggling to face this current economic crisis with some measure of dignity and courage.

And then something unimaginably awful happens on a small island thousands of miles from most of our citizens and, as they have done time and time again, the American people step up. By Thursday evening, the American Red Cross had raised more than $35 million for their Earthquake relief fund, including $8 million through an unprecedented text messaging effort propelled by Facebook and Twitter.

According to many relief organizations, while the average donation amount has been lower than in previous international crises, the number of donations has gone up. People may have less to give, but more people than ever are willing to give what they can.

Which is why, after reading reports on the Huffington Post and from other news outlets that some major banks have been taking a cut from donations made through credit cards in the form of a 3% interchange fee, I got mad.

Yesterday, I sent a letter to the major American credit card providers and banks asking them to waive all transaction fees for donations made to relief organizations on behalf of the Haitian earthquake effort. Some, including Visa and Mastercard, stepped up immediately and should be rewarded for that effort by our recognition and support.

I am a pragmatic person. I started and ran two successful businesses in my life before I came to Congress. I try to avoid overheated rhetoric or carte blanche indictments. And I think that companies have a right to make a profit.

But I also think that, in a country where taxpayers had to rush in to bail out big banks just barely over a year ago, where abuses by many of the credit lenders reached such a fever pitch that Congress had to step in and regulate practices just a few short months ago, banks and credit card companies need to apply some level of conscience to their actions.

As any business owner knows, there is a time to be concerned with the bottom line and a time to remember that you have a responsibility to be a good corporate citizen.

American Express announced intentions to waive transaction fees before my letter went out. Shortly after Discover said they would waive some fees. Capitol One is actually the only major credit card provider with a program already in place to waive transaction fees for charitable donations.

We still await word from Citigroup, JP Morgan Chase, Wells Fargo, and Bank of America. My hope is that these providers will follow the example of Capitol One, American Express, Discover, Visa and Mastercard and make sure that every dollar donated to earthquake relief gets directly to the people of Haiti.

Before I came to Congress I served as the chairman of our local food bank. Non-profit organizations that serve those in distress do a tremendous service to our world community and are not often in a position to advocate for business practices that would help them do their job better. And that is where the rest of us, especially those of us elected to serve in Congress, must step in.

(Cross-posted from The Huffington Post)

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A sobering picture (Rep. Carolyn Maloney)

Yesterday, at my request, the Government Accountability Office (GAO) released a report that provides a thorough understanding of the state of the housing market at the end of June 2009. A table in the Appendix of that report, which I have turned into a detailed map, provides a sobering snapshot of the percentage of mortgages in default or in the foreclosure process.

The House recently passed a sweeping regulatory reform package, the Wall Street Reform and Consumer Protection Act, which will help prevent a similar crisis in the future. As part of that package, a provision will create a Consumer Financial Protection Agency to protect borrowers from predatory lending practices associated with many of these nonprime mortgages. The bill will also provide transparency in the over-the-counter derivatives market so that banks will not be able to offer the unregulated mortgaged related securities that led to our financial crisis.

It is now up to the Senate to act. As Senators consider this landmark consumer financial protection legislation, let's hope they remember yesterday’s GAO report, and in particular its map of troubled mortgages. Both serve as powerful reminders that for many American families, the dream of homeownership has turned into a nightmare of foreclosure.

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America's New Year's unemployment hangover (Rep. John Carter)

One cannot drink oneself into sobriety. Yet that is precisely what Congressional Democrats and the Obama Administration have attempted with our economy for the past year with predictable and painful results.

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Unemployment continues to stand at an official 10% for the third month in a row, the worst joblessness in 27 years.  The real unemployment rate is far worse.  Included in the December economic figures was a shocker – the percentage of adult men who are working has fallen to the lowest level in recorded U.S. history at just 80%.  That means that one in five men in this country between 18 and 54 are neither working nor claiming unemployment.  They have fallen completely out of the workforce.

That helps explain why December’s unemployment rate remained at November’s 10% rate in spite of an additional 85,000 Americans losing their jobs.  At the same time the new jobless claims were added, many of the previously unemployed were simply removed from the workforce numbers altogether.

Economists estimate our true jobless rate as high as 17%, and that could grow in coming months as more Americans exhaust their unemployment benefits and lose homes to foreclosure.

When Barack Obama was sworn into office last January, unemployment stood at 7.2%.  President Obama of course blamed this on the preceding Bush Administration, while ignoring the fact that his fellow Democrats had total control of the House and Senate since 2006.

We were told that unless we passed his $757 billion stimulus plan immediately, unemployment could jump to 8% before we started recovering midway through 2009.  Democrats passed it, and unemployment has soared to over 10% and stayed there.

Did any of this budget-breaking spending do any good? Not according to the Associated Press:

“Spend a lot or spend nothing at all, it didn’t matter, the AP analysis showed: Local unemployment rates rose and fell regardless of how much stimulus money Washington poured out for transportation, raising questions about Obama’s argument that more road money would address an ‘urgent need to accelerate job growth” (AP, 1/11/10).

So Congressional Democrats and the President pushed for a “cap and trade” energy tax and a health care takeover that will add millions more to the jobless roles through massive new taxes, higher consumer prices, oppressive regulations, and out-of-control federal spending and deficits.

The unemployment rate soared even higher, but Obama and Pelosi learned nothing.  They pushed another “stimulus” bill through the House in December, putting taxpayers another $75 billion in debt.

Deficit spending undermines economic growth.  Shoring up failed businesses and business practices undermines economic growth.  Piling on debt for our children and grandchildren undermines economic growth.  Lack of economic growth means more joblessness.

The Obama Administration and the House of Pelosi spent 2009 in a drunken binge of government spending and power grabs.  We are left in January 2010 with a splitting deficit hangover, and the only way to recover is to set aside the bottle of fiscal irresponsibility.

We can begin by repealing whatever is left of the Bush and Obama Administration “stimulus” plans, ending the energy and health care takeovers, and recovering the taxpayer funds handed over to failed companies.

Then we can start creating sustainable new jobs through cutting taxes for individuals and small businesses, taking the burden of debt off our children, and restoring the vibrancy of our free market economy that has been stifled by Washington.

Cross-posted from Big Government

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The Big Question: Will a new bank fee help?

Some of the nation's top political commentators, legislators and intellectuals offer some insight into the biggest question burning up the blogosphere today.

Today's question:

Will a new fee on banks help Democrats lower the debt and win public approval?

(Read today's responses after the jump.)

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