UFE's E-News September 2009

In this Issue:

 

Article One

Sustaining OUR Movement

These days, opportunity isn't just knocking; it's kicking in every door in the Capitol. This fall, everything from health care to tax to immigration reform is vying for the congressional spotlight. With so many crucial issues on the table, constant and collective pressure is the only way to ensure that reform is meaningful and effective.

In his article in The Guardian, Michael Tomasky asks whether the "Obama movement" can descend from euphoria and wake up to the exasperating reality of enacting legislative reform – without losing its tenacity and momentum. It's a valid question, but it's a bit off base. It was a people's movement that made him "President" Obama. And, yes, its real purpose – to achieve lasting progressive change – remains. But it desperately needs to refocus and reengage.

Tomasky misses the point of having a movement for change. It's not just to be "realists." Every now and then, a movement may need to be pragmatic about short-term policy goals, but more importantly, it must continually advance its uncompromising long-term vision. It should strive for more than 'good enough' or 'whatever's-on-the-table.' And it doesn't have to be behind our President's agenda, or any other individual's for that matter.

Movements are born of necessity. They are comprised of individuals drawn to one another by shared values and the desire for change – enough so, that its supporters are willing to do the hard work it takes to generate support for an idea or proposal or initiative guided by its principles. A movement for change must serve to hold its elected officials accountable, ensuring that those entrusted with power to represent average people don't dodge their responsibilities or cater only to big wallets. And it's the responsibility of that movement to be consistent – to see that the voices of the grassroots are heard over the years (not just at election time) on all issues critical to it.

To that end, Tomasky is absolutely right to note that "[movements] do the hard, slow work of winning political battles and changing public opinion over time [...] The end of euphoria should lead not to disillusionment, but to seriousness of purpose."

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Article Two

Whose deficit is it anyway?

All Americans waited with breathless anticipation on the morning of August 26th for both the Congressional Budget Office and The Office of Management and Budget to release the latest, exciting, newly revised deficit projections. The headlines of the day painted a simple grim picture: Abandon All Hope, The Deficit is Going Up.

As it turns out, there might be some interesting stories behind the big, scary deficit hysteria. The smart folks at the Center for Budget and Policy Priorities laid the groundwork with their standard clear thinking. Rising deficit projections might be something less than the disaster they're made out to be, and their source may surprise some people (and be all too unsurprising to others).

The stimulus package and the cost of the bailouts are playing their part in the projected deficits. But they were necessary responses to the collapse of the financial sector and the worst recession in 70 years, and it's probably worth highlighting that they've helped to avert a new Great Depression. These recovery measures, mind you, are also a much smaller piece of the deficit picture than a few other factors, namely the increased cost of assistance to the millions who have been unemployed and impoverished by the economic crisis, and the spectacularly misguided Bush tax cuts and the ill-conceived wars launched under his watch. In fact, the disastrous policies of the Bush administration are the largest slice of our big, scary, new deficit.

Regardless of who caused the deficit, it unfortunately belongs to all of us now. With unemployment still climbing to historic highs, we need to continue short-term spending to prop up our sputtering economy. We do, however, need to get the deficit in check in the long run. There are steps we should take now to get the ball rolling.

Healthcare costs are the biggest driver of our long-term spending increases. We need to pass strong healthcare reform that reigns in spending and, hopefully, gets us to stop paying more on healthcare than any other developed country. And we need to repeal the Bush tax cuts that drove down government revenue in order to keep more dollars in the pockets of the wealthiest Americans.

Additional reading:

"Once and Future Taxes," New York Times

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Article Three

Wealth inequality declining! But, wait...

As the economy slowly begins to pick up – very slowly, that is – some are starting to search for signs of optimism. The problem is, this search is like an egg hunt, but what we find is empty. Robert Frank was quick to toot his own horn in the Wall Street Journal, writing that one year ago he'd predicted a decline in wealth inequality due to the financial meltdown – and now he has a study to back him up!

But information based on snippets of history, like the data Frank referred to, can be horribly misleading. And, if we accept it too readily, we're bound for disappointment. To his credit, Frank does acknowledge an important point, stating, "The world is staggeringly unequal...the tiny sliver of those with $5 million or more in assets (...clearly a select club) [owns] more than the total population of those with $100,000 or less."

So, let's hold back our "hoorays," and take stock of the information that really matters:

Just before the recession began in 2007, income inequality was at its highest level since the Gilded Age, just before the Great Depression. Post-crisis, income among top U.S. earners began to decline, leading to an artificial "drop" in inequality. But we've seen this before. During the 1991 and 2001 recessions, the gap between wealthiest 1% and the rest of us also narrowed. As soon as the economy rebounded, however, so did the upward trend of wealth inequality in the U.S that began in the late 1970s.

To say that wealth inequality is shrinking doesn't pay proper respect to the real, and proportionally more significant losses sustained by the millions of low- and middle-income individuals and families who have lost their jobs, savings, homes and even good health as a result of this recession. Wealthy individuals can, without a sweat, regain wealth lost in investments when asset prices rebound, even in a jobless recovery. As for the rest of us, losses due to recession are quite a bit harder to get back.

In resolving our economic woes, we have to play a little backwards hopscotch and observe the big picture. If we want lasting reductions in economic inequality, and to avert future economic disasters like this one, we'll need a comprehensive plan with a keen eye on creating opportunity for all, and preventing concentration of wealth and power in the few. Without that plan, this current trend in wealth distribution won't last – the already wealthy will quickly pull even further ahead, leaving the rest of us even further behind.

Additional reading:

"This Time We Can't Leave the Middle Class Behind," Jared Bernstein, Huffington Post via the White House Briefing Room blog

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Article Four

What's In A Job?

We're not surprised to hear that the financial industry has seen a 7.1% national decline in jobs. Lost jobs are never a good thing, but maybe it's a good thing to have a lot less "talent" there, considering what ingenuity in the financial industry has done for our economy. A study by a group of economists said that "allocation of talent to professions such as finance...where returns come from distribution of wealth from others rather than wealth creation...leads to lower productivity growth, fewer technological opportunities and slower economic growth." Lisa Bannon reported on this study in, of all places, The Wall Street Journal.

The study also suggests that smart, well-educated people can improve technology, and increase productivity and income in their lines of work. Researchers of the study acknowledged that some professions are more socially valuable than others, even if the salaries attached to them aren't as flattering. Now, with fewer opportunities for lofty salaries in the financial sector, more people are pursuing careers in other areas, like education and healthcare. So, CHEERS to our nation's health and intellect!

In the context of this "jobless recovery," this study begs the question: If creating fairly paid, socially valuable jobs could advance technology, increase productivity, and create new wealth for our country – all the while employing people – then why aren't all of our legislators focused on implementing programs that would more broadly create those types of jobs?

As of late, it appears the role of many of our elected officials has been to either obstruct or defend legislative efforts, but not to advance them. The key to the unemployment issue is social investment – both financial and vocational. Our students and workforce need quality education and training. Our people need healthcare. Our roads, bridges and public transportation need repairs, maintenance and expansion. And our environment is crying for development of sustainable energy practices. If we create opportunities for would-be workers in jobs that will have lasting benefits for our economy, all of us – not just Wall Street casino junkies – will see massive returns on our investments.

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Article Five

All Work and No Pay

As Brian Miller noted in his Labor Day op-ed, honoring the work of average Americans means little if we don't design the rules of our economy to benefit all workers – not just the rich. There are a lot of people who contribute to our economy whose work goes unrecognized and, sometimes, unpaid.

When companies are experiencing financial strife (as many are these days), wage reductions are common. But another trend, wage theft, is becoming increasingly common, and disturbingly so.

Take New Orleans, for example. As the city continues to rebuild, homeowners and small contractors hire day laborers off of street corners for short-term work. Too often these individuals work a day or more without a dime to show for it. Similar accounts have been reported in other cities and in more formal work settings. Affected workers are often immigrants, both documented and undocumented, with little leverage to fight for their rights – though the tide is slowly beginning to shift.

The efforts of activist groups are starting to stir things up, bringing issues of workers' rights violation closer to the top of the legislative pot. In New Orleans and other cities where the problem persists, laws have been proposed to criminalize wage theft. The Chelsea Collaborative and Centro Presente – two Boston-based organizations UFE has worked closely with on issues of immigrant rights – have seen recent success by bringing wage theft and other worker abuses into the spotlight. These victories are small, but significant steps toward treating all of our workers with fairness and dignity.

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