McCain relies on "experts" for economic advice

You've probably heard that John McCain is considering Carly Fiorina for vice-president and that Phil Gramm is his main economics guru. This shows that McCain really is "Vintage Bush." (Thanks michmark.) He doesn't have to know anything, he just needs to consult with the not so right people.

Let me start with Carly Fiorina, who will be addressing the Detroit Regional Chamber's Mackinac Policy Conference today. As you might recall, Fiorina was ousted from her position as CEO at HP for mismanagement and failing to produce the returns and corporate profits expected. Her position didn't work out too well for workers either. Fiorina executed a merger between HP and Compaq and thousands of employees were laid off as a result. Don't feel too sorry for Fiorna though. She walked away with a $21 million dollar severance package, which was 2.5 times her base annual salary.

Fiorna's employment with HP was a lose-lose proposition all the way around, but that doesn't seem to matter to McCain, possibly because Carly is all for cutting taxes. The Michigan Business Review interviewed her and these quotes pretty much set the tone:

So we've got to get our climate for business better. We have to lower the tax rates at both a federal and a state level. We have to get useless paperwork, bureaucracy and regulation out of the way. We have to motivate businesses to invest.[...]

But Michigan needs to think very long and hard about the tax climate it has compared to the other states.

She was also asked about Hewlett-Packard possibly acquiring EDS and what kind of impact she thought it would have on this state.

And frankly I just don't know enough about it to know what the specific impact on Michigan will be.

But what I can tell you, having done a massive merger myself and executed it successfully, one of the first questions that a chief executive is faced with is, when you are consolidating two businesses, where will the jobs go?

In HP's case, those jobs went overseas to China and Russia because, as Carly said, "there is no job that is America's God-given right anymore."

Not all vice-presidents play an active role in influencing policy, so Fiorina may be benign in that area, but not so Phil Gramm. McCain has made it clear that Gramm is his main economic guru, or as David Corn calls him, Foreclosure Phil.

Who's to blame for the biggest financial catastrophe of our time? There are plenty of culprits, but one candidate for lead perp is former Sen. Phil Gramm. Eight years ago, as part of a decades-long anti-regulatory crusade, Gramm pulled a sly legislative maneuver that greased the way to the multibillion-dollar subprime meltdown. Yet has Gramm been banished from the corridors of power? Reviled as the villain who bankrupted Middle America? Hardly. Now a well-paid executive at a Swiss bank, Gramm cochairs Sen. John McCain's presidential campaign and advises the Republican candidate on economic matters. He's been mentioned as a possible Treasury secretary should McCain win. That's right: A guy who helped screw up the global financial system could end up in charge of US economic policy. Talk about a market failure.

Tax cuts, free trade, deregulation. McCain is pushing the same agenda that's worked well for the rich at the expense of average Americans, and he aided and abetted by people like Gramm and Fiorina. McCain is simply more of the same from a party that has nothing to offer average Americans.


(Cross-posted at BFM.)

Personal bankruptcies up in 2007

Add bankruptcy to the list of ways Americans are dealing with the economy:

Despite the 2005 passage of a law that made it more difficult and expensive to file for personal bankruptcy, more Americans are choosing bankruptcy over destitution. Filings -- including Chapter 7, which wipes out debt, and Chapter 13, which reorganizes it -- totaled 822,590 last year, up 38 percent from 2006.

Sadly, unless we start to do something about economic inequality in this country, it doesn't look good moving forward [emphasis mine]:

"The rise in bankruptcies is not about something that happened last week or last month," said Elizabeth Warren, a Harvard Law School professor and a bankruptcy expert. "It's about the fundamentals. It's about declining wages, rising costs, inadequate health insurance, job instability. More hardworking middle-class families simply can't make it in this economy, and it's only getting worse."

However, inequality doesn't explain it all.

Bankruptcy attorneys and economists said the trend cuts across all segments of society -- the young and the old, homeowners with bad mortgages and renters, the poor and the middle class. In the past, bankruptcies were more common among people who had sudden life changes, such as a divorce, illness or job loss. Now, the bankrupt are people who have simply racked up too much debt.

"It is pretty widespread because there are widespread problems in the economy," said Peter Morici, an economist at the University of Maryland at College Park. "Americans have been spending 105 percent of their income for the last three or four years. That's not sustainable."

I have sympathy for those who find themselves in over their heads due to illness or other life changing events, but I have little compassion for those of you who lived beyond your means or scammed the system.

Take the housing mess we currently find ourselves in as an example. I was talking to a friend in the mortgage industry recently and I asked him why so many companies gave loans to people with poor credit. His response shocked me because it boiled down to "everyone else was doing it, so why shouldn't I?" He said if his company turned down an applicant that person would just move on to another company where they'd be approved for a mortgage and that broker would earn the commission. He said he just couldn't see giving the business away even if the person's credit was shaky.

He was quick to point out that credit worthy homeowners aren't perfect angels either. The latest trend he's seeing is homeowners with lots of equity in their homes taking out home equity loans, paying cash for an equally sized or larger home at below market value, and then walking away from their current home. They end up living in a home that's paid off and the bank gets stuck with their old house and the outstanding mortgage. I call that stealing.

Nice world we live in, eh? Everyone is scamming everyone and no one is being held accountable, and those of us who play by the rules and honor our obligations have to live with the results of this mess. Maybe we need to bring back debtor's prisons to restore some common sense to this country.

Let's Go Red Wings!

The Detroit Red Wings face the Pittsburgh Penguins in game one of the Stanley Cup playoffs tomorrow. The Free Press believes the Wings will win in six. Yahoo Sports says the Wings will get the job done in five games because Detroit has the experience, special teams and goaltending.

I call it for the Wings too, but I have to admit I'm a wee bit worried for several reasons, although not about the Wings abilities. I'm worried because my husband is a native of Pittsburgh and he's cheering for the Penguins. There will be no harmony at my house for the next week or so! (Hubby already pulled his Penguins jersey out of the closet.)

I'm also worried because my husband is a jinx. If he simply walks into the room when the Wings are on TV, the opposing team invariably wins. Honest. Last Saturday, Dallas and Detroit were tied 1-1 when my husband walked past the television on his way outside and BANG! The Stars scored, and we ended up losing that game.

My husband is aware that he is a jinx and normally doesn't mind listening to the game from another room, but therein lies the problem. Because we're playing the Penguins, he plans on sitting directly in front of the television for every single game wearing his jersey! Arghh...

So, if any Wings are reading this, do you guys think you could get it done in four games for the sake of harmony in my home? And because I also want to see my husband's Penguins jersey stuffed to the back of the closet again, where it belongs!



Good Luck Wings!

(Cross-posted at Blogging for Michigan.)

Why do Republicans hate the poor?

Just when I think Republicans can't stoop any lower, I come across something like this from the National Low Income Housing Coalition that makes my blood run cold. [My emphasis]

WASHINGTON, DC - Responding to pressure from Ranking Member Senator Richard Shelby (R-AL), the Senate Banking, Housing, and Urban Affairs Committee appears to be on the verge of diverting funds designated for a housing trust fund for housing for the poorest Americans to pay for Committee Chairman Christopher Dodd’s (D-CT) new program to refinance homeowners facing foreclosure.

In his bill “The Federal Housing Finance Regulatory Reform Act of 2008,” Chairman Dodd proposes to allow the Federal Housing Administration to insure refinanced mortgages of homeowners who face foreclosure. The Congressional Budget Office estimates this new program creates a potential liability for the federal government of $1.7 billion.

Reports are that Senator Shelby will only agree to the new FHA program if it is paid for by non-taxpayer funds. Senator Dodd’s bill also creates a housing trust fund with resources from Fannie Mae and Freddie Mac to build or preserve rental housing for extremely low and very low income people. Senator Shelby wants those funds to be used to pay for the new FHA program instead.

“After the $30 billion taxpayer guaranteed bail out of Bear Sterns and the $25 billion Senate-passed taxpayer funded bail out for homebuilders, for Committee Republicans to insist that the taxpayers should not pay $1.7 billion to prevent homeowners from losing their homes, has to be called what it is - hypocrisy,” said Sheila Crowley, President of the National Low Income Housing Coalition.

In a letter today to Chairman Dodd, the National Housing Trust Fund Campaign urged him to “identify other resources to pay for the new FHA program besides the only ones in this broad housing package that are dedicated to serving the poorest families in our country.”

I can think of two sources off the top of my head: They could roll back the tax cuts on the richest Americans or ask those billionaire fund managers to pay the same tax rates on wages the rest of us do.

The Republicans continued attacks against our most vulnerable citizens is cruel and immoral, and I honestly can't understand why they continue to do so much for the rich at the expense of those with the least. I'm dumbfounded by their mean-spiritedness.

h/t Dean Baker

Cross-posted here.

No money for bridges, lots for war

Money woes may have led to the collapse of that bridge in Minnesota last year, the one that killed 13 people, according to a report conducted for the state Legislature by a private law firm.

But the key finding was on the money issue.

"Financial considerations, we believe, did play a part in the decision-making" on bridge maintenance, Robert Stein, one of the attorneys, told lawmakers during a briefing. "Sometimes it's easier just to take the least expensive alternative or just commission another study."

Tom Johnson, another attorney who worked on the report, told legislators the maintenance work wasn't sufficient. The bridge was rated in "serious to poor" condition for 17 consecutive years by the National Bridge Inventory Standards.

"The question for the Legislature is, do you want to have a bridge that remains in a poor condition over 17 years?" Johnson told lawmakers.

There were other issues too, but the lack of money necessary for proper maintenance was the main issue. The question just begs to be asked...

When are we going to start taking care of our needs here at home?

(Cross-posted at BFM.)

We've tried it their way, and it hasn't worked.

Cliff Schecter on the real John McCain:

"It is dangerous for a democracy when a presidential candidate can lie with impunity, change positions on a whim, and physically and verbally threaten others and virtually none of it is reported by a besotted media eagerly awaiting the next moment when he might slap their backs in friendship."

It's also dangerous for democracy that so many Americans support McCain, or any Republican for that matter. Jared Bernstein reminds us that the GOP had their chance and they blew it.

...anyone interested in a future that looks quite different from the present, and most Americans are leaning in precisely that direction, needs to remember but one mantra. It's one of the most important arguments progressives can make between now and November, and it's simple, compelling, and unarguably true: we've tried it their way, and it hasn't worked.

Whether it's the economy, the environment, foreign policy, fiscal policy, government competency, judicial fairness... you name it... we've tried it their way, and it hasn't worked.

They've particularly failed in what matters most to working families:

Employment grew one third as fast as the average over the 2000s business cycle and the unemployment rate, though low on average, was higher at the end of the cycle than at the beginning. Perhaps the most damning indictment is this: for the first time on record, going back to the mid-1940s, the income of the typical, middle-income family was slightly lower last year than at the prior peak in 2000 (see their figure A).

The reason, of course, is that the benefits of the economy's growth flowed largely to those at the top of the scale, an outcome long associated with YOYO'ism [your on your own'ism]. In the history of income inequality data going back to 1913, income is now more concentrated among the top 1% of households than in any other year, bar one: 1928.

So there you have it: the great, neo-con economic experiment is over and the results are in. Outside of the top 1%, there's less income growth than in any past business cycle. The key macro-indicators, such as employment, GDP growth, and investment have also faired uniquely poorly. The anti-government, deregulatory agenda has led to fatal incompetence, a massive housing bubble, ailing global credit markets, and near-recessionary growth for the US. The "ownership society" is a cruel joke: homeownership rates are falling for the first time in decades. [emphasis mine]

I disagree with Bernstein on only one point - "the great, neo-con experiment." It wasn't an experiment. They knew exactly what they were doing.

Blogging for Michigan is going to Denver!

A nice honor was bestowed on Blogging for Michigan by the Democratic National Convention Committee yesterday. They were picked to participate in the State Blogger Corps at the convention in Denver this August.

Howard Dean made the announcement yesterday:

"Similar to the record-breaking voter turnout our Party has seen during the primary season, the demand for these coveted blogger positions is yet another indicator of the tremendous interest in this historic Convention," said Governor Dean. "The Internet has played a critical role in connecting Americans to elected officials and candidates seeking office. The DemConvention State Blogger Corps will continue to foster this dialogue - in all 50 of our states and our territories too - as we head towards this year's historic election and elect a Democrat to the White House."

The DNCC previously announced an expansion of the credentialed blogger pool from past Conventions and the addition of a state blogger credentialing program. As part of the new DemConvention State Blogger Corps, designed for bloggers covering state and local politics, bloggers will receive unparalleled access to state delegations and the floor of the Convention hall. In a truly unprecedented move, the DNCC will seat these bloggers with their respective delegations during the historic four-day event, providing even greater access for local coverage and perspective. Highlights from these blogs will also be featured on www.DemConvention.com in the lead up to and during the Convention.

One blog was selected from each state and territory. You can check here to see the list of other winners picked from a field of more than 400 applicants. The applicants not selected will still be eligible to be part of a General Blogger Pool.

As many of you know, I'm a front-pager at Blogging for Michigan, so I was thrilled to hear we were chosen. (No, I'm not going to Denver, someone has to stay home and tend the hearth.) Although I help provide content to the blog, BFM is the brainchild of Christine Barry and Cathleen (wizardkitten) Carrigan, and it's their hard work that deserves to be recognized. Even more amazing to consider is the fact that BFM just celebrated their 1st birthday at the beginning of May! Those ladies are dynamos! (Not to take anything away from the other guys and gals who contribute to the blog or course, but those two are the primary contributors.)

So, as you might imagine, we've all been pretty excited since we got the news (on the same day Obama and Edwards came to Michigan no less!), and it was a kick to wake up to an article about us (wizardkitten in particular) in USA Today.

Dispatches from this year's Democratic National Convention will be penned by writers with names like wizardkitten and appear in bloggingformichigan.com and other sites, as well as coming from more traditional names, newspapers and television broadcasts.

The Democratic Party on Wednesday chose 55 bloggers who will have access to the floor of the Denver convention representing 54 states and territories and Americans abroad. Wizardkitten — aka Cathleen Carrigan, a 42-year-old Michigan blogger and former rock-band bassist — said the news that her blog was selected "thrilled" and "overwhelmed" her.

Picked from a field of 400 applicants, members of the State Blogger Corps will blog for their state and be seated with their delegation during the August convention. The fact that Democrats haven't decided whether they will seat delegates from the disputed primaries in Michigan and Florida won't affect Carrigan, but she still remains optimistic she will be alongside her delegation.

Wizardkitten is also optimistic a Democrat will be our next president! Blogging for Michigan plans on doing whatever it takes to help make that happen.

Postscript: I wanted to make sure I recognized all the other hard working bloggers in our state. Michigan is fortunate to have so many great ones (check the side bar links or click here) and I'm certain many of them will be picked to be part of the General Blogger Pool.

Wedge Issues and Republicans

Harold Meyerson has a op-ed about "the American president Americans have been waiting for" in today's WaPo. He's speaking about John McCain of course, whose campaign is pushing the theme of McCain's "American identity." That's because it's the only way they feel he can prevail over Obama. Of course, "American" is code for "white" and "Christian," and his campaign managers aren't dumb, they know a disproportionate number of people write "American" when answering the census question on ethnic origin.

I guess those "Americans" answer that way in an effort to distinguish themselves from the "others." Meyerson reminds us about one "other" American:

Now, I mean to take nothing away from McCain's Americanness by noting that it's Obama's story that represents a triumph of specifically American identity over racial and religious identity. It was the lure of America, the shining city on a hill, that brought his black Kenyan father here, where he met Obama's white Kansan mother. It is because America is uniquely the land of immigrants and has moved beyond a racial caste system that Obama exists, has thrived and stands a good chance of being our next president.

Of course, Republicans don't want us to be inspired by Obama's story. They want race and religion to be wedge issues, and there's a good reason for that.

In poll after poll, there's not a single major issue on which the public agrees with them or their presumptive nominee. Not Iraq, certainly. Not the economy. Should the election turn on the question of "What are you going to do for America?" rather than "Are you a real American?" Republicans are doomed. They offer no solutions for the stagnation (or decline) of American living standards, or for the weakening of America's economic power. They offer no resolution to America's war of choice in Iraq. Their party leader, the incumbent president, let a great American city drown. They are the American party, and McCain the American nominee, that hasn't a clue about how to help America in its (prolonged, I fear) moment of need.

They've failed us utterly and they know it. However, instead of taking responsibility and admitting their failures, they're decided to resort to racial and religious bigotry to hold onto power. That doesn't surprise me, and it doesn't worry me. I believe a growing majority of Americans have matured and learned to embrace the differences among us (as witnessed by the number of people voting for Obama). It's the GOP that still clings to their childish ways.

Wind Power Capabilities by 2030

Here’s a tidbit of information about wind energy from today’s WaPo.

The Energy Department said yesterday that the United States has the ability to meet 20 percent of its electricity-generation needs with wind by 2030, enough to displace 50 percent of natural gas consumption and 18 percent of coal consumption.[…]

The report noted that a big expansion of wind-power generation would also cut the amount of water used by the electricity industry by 17 percent by 2030.

It wouldn’t be cheap to meet those goals. The report said it would cost nearly $197 billion, but that most of that would be offset by nearly $155 billion in lower fuel expenditures, among other offsetting positive effects like reduced carbon emissions.

To put an investment like that into perspective, it works out to about $9 billion a year over 22 years. Heck, we spend more than that in Iraq every month.

(Cross-posted at Blogging for Michigan.)

Republicans vote against their mothers

Add motherhood to the list of things Republicans hate:

On Wednesday afternoon, the House had just voted, 412 to 0, to pass H. Res. 1113, "Celebrating the role of mothers in the United States and supporting the goals and ideals of Mother's Day," when Rep. Todd Tiahrt (R-Kan.), rose in protest.

"Mr. Speaker, I move to reconsider the vote," he announced.

Rep. Kathy Castor (D-Fla.), who has two young daughters, moved to table Tiahrt's request, setting up a revote. This time, 178 Republicans cast their votes against mothers.

A majority of the House GOP has now voted against motherhood. Nice. I've often said Republicans would throw their own mothers under a bus, now I have proof.

Will the real frauds please stand up?

Republican efforts to suppress minority votes worked according to plan in the Indiana primary.

About 12 Indiana nuns were turned away Tuesday from a polling place by a fellow bride of Christ because they didn't have state or federal identification bearing a photograph. Sister Julie McGuire said she was forced to turn away her fellow sisters at Saint Mary's Convent in South Bend, across the street from the University of Notre Dame, because they had been told earlier that they would need such an ID to vote. [...]

They weren't given provisional ballots because it would be impossible to get them to a motor vehicle branch and back in the 10-day time frame allotted by the law, Sister McGuire said. "You have to remember that some of these ladies don't walk well. They're in wheelchairs or on walkers or electric carts."

Who do you think is more likely to commit voter fraud? Nuns or pious-sounding Republicans?

Indiana has the strictest photo ID law in the country thanks to Republican-led efforts designed to combat ballot fraud, not that fraud has every been found to be a problem. In fact, no one has ever been prosecuted for impersonating a voter at the polls in Indiana.

On the other hand, I know many Republicans who could be accused of impersonating compassionate Christians.

Gas prices continue to rise

(For my out-of-state friends, I cross-posted this at Blogging for Michigan, but I think you'll be able to identify with what I wrote unless gas prices are cheap where you live.)

According to AAA Michigan, gas prices are at an all-time high in Michigan, averaging $3.65 per gallon. The cheapest price is in the Flint area ($3.61 per gallon) and the highest average is in Marquette ($3.73 per gallon). And, for a short time today, oil prices briefly surged over $120 dollars a barrel.

The high prices have some people praying at the pump, and one 10-year-old boy in Burton wrote letters to several local officials asking them to do something. He's feeling the pain because his mother has stopped buying extra goodies when she goes shopping. We're all cutting back because of high gas prices.

Blame it on increased demand or our falling dollar, but it doesn't look like prices will go down anytime soon (if ever). However, there is some good news on the fuel economy front that could accomplish two things at once - bring jobs to Michigan and help automakers achieve the 31.6 mpg standard the NHTSA proposed they reach by 2015.

A surplus Delphi research lab in Macomb County's Shelby Township has been donated to an initiative that could help automakers meet stringent new federal fuel economy guidelines.

USAutoPARTs, expected to be up and running by June, will involve auto suppliers, state government, the U.S. Department of Energy and universities in clearing roadblocks on the path to energy efficiency.

If successful, the initiative could help create thousands of Michigan jobs and bring millions in federal research dollars to the state. [...]

The consortium will research a variety of "pre-competitive" areas, such as developing lighter-weight materials, improving engine combustion efficiency, and figuring out ways to heat and cool interiors without drawing power from the engine.

The U.S. Army's National Automotive Center in Warren is involved, along with Wayne State University. The school signed up to teach evening classes at USAutoPARTs, which will provide a place for colleges to educate students in new automotive technologies.

I guess this is one of those examples of turning lemons into lemonade, although I'm not quite sure that 10-year-old boy in Burton would see it that way.

Bush's job creation claims debunked

Economist Dean Baker disputes the New York Times claim that "Mr. Bush has spent much of his presidency riding high on claims of solid job growth."

Not so, says Baker. Job growth has actually been pretty bad through most of President Bush's time in office. How bad? President Bush comes in dead last in job creation among recent presidents, even falling behind his dad's dismal record. Ouch!


No wonder recent polls show Bush is the most unpopular president in modern American history.

(Cross-posted at BFM.)