American Forum Op-Ed

AMERICAN FORUM

By Frank Knapp

Whether Americans voted for Republicans or Democrats in the mid-term election, one thing is clear: Voters were demanding that Congress focus intensively on job creation on Main Street -- not lobbyists and campaign donors from big business and Wall Street.

Apparently, many in Congress and President Obama, if recent reports are true, either didn't get the message or simply don't care now that the voting is over.

The top legislative priority of the newly "Tea Party-empowered" during the lame duck session is hardly what Tea Party insurgents had in mind. The proposal is to (1) increase the national debt by borrowing $700 billion to $1 trillion over the next 10 years; (2) spend the money on big, non-job producing tax cuts for the wealthiest 2 percent of Americans; (3) use small business as the excuse.

This bad-business proposal is now being pushed in Congress and the media by those advocating extending the Bush-era tax cuts to the top two income brackets. While proponents acknowledge that less than 3 percent of the taxpayers who would receive the tax cuts actually have some business income, they insist that these approximately 900,000 taxpayers are the very successful small business owners who will stop hiring and purchasing if they don't get their tax cut. Wrong, wrong, wrong.

First, almost all real small business owners are middle-class Americans with middle-class incomes. Walk down any Main Street and you won't find small business owners netting over $250,000 a year in profit (dollars remaining after the cost of employee wages and other business expenses are deducted from taxable income).

These middle-income, Main Street small businesses are the ones we really need to help create the new jobs to lift us out of this down economy. There is absolutely no evidence that the wealthiest small business owners create more jobs than those in any other tax brackets. As any small business owner knows, the number of employees does not correlate with profit.

So who are these mysterious high-income "small business" taxpayers in the top two brackets who Congress is considering borrowing hundreds of billions from foreign countries in order to give a tax cut?

Very few of them are what most would consider small business owners. They include partners in large corporate law firms, hedge fund managers, K Street lobbyists, high-powered consultants, Wall Street bond traders and the country's wealthiest
millionaires -- all of whom claim some business income and thus are counted in IRS eyes as small businesses. These aren't "mom and pop" businesses, says Adam Looney, senior fellow at the Brookings Institution.

Not only are the vast majority of these 900,000 "faux" small business taxpayers not involved in job hiring decisions, the tax cut won't even cause them to significantly increase their personal spending to create the demand for new jobs.

The non-partisan Congressional Budget Office (CBO) evaluated 11 policy options in terms of boosting economic growth and creating jobs. It found that "policies that would temporarily increase the after-tax income of people with relatively high income...would have smaller effects because such tax cuts would probably not affect the recipients' spending significantly."

The wealthiest Americans are more likely to save their money from a tax cut rather than spend it, according to Moody's Analytics, Inc.

If we really want to give a tax cut that will create jobs, then we could cut employer payroll taxes on businesses that actually increase their workforce. The CBO estimates this would have six to eight times as much job-creating impact as an income tax cut. The policy the CBO found with the biggest bang for the buck is extending unemployment insurance. It would boost demand by providing income to people most needing to spend it in the local economy.

Alternatively we could create more customers for our small businesses through infrastructure projects, many of them long overdue upkeep or modernization, or keeping teachers and law enforcement officers working rather than laid off. The policy the CBO found with the biggest bang for the buck is extending unemployment insurance -- a direct infusion of money into local economies by people buying for their basic needs.

Increasing the nation's deficit while not saving or creating jobs is just more politics as usual in Washington where those with the most money get rewarded with even more money.

Congress needs to hear this loud and clear. These high-end tax cuts serve K Street lobbyists not Main Street shop owners. Politicians should not use us to justify a very bad business decision.

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Knapp is President and CEO of the South Carolina Small Business Chamber of Commerce.
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Copyright (C) 2010 by American Forum. 11/2010

AMERICAN FORUM

By Susan Shaer

My uncle sifted through cracked, black and white photos of soldiers. Uncle Rob was in a rehab hospital, slowly fading. The photos were his buddies from World War II. A shoe box that held these photos and medals was practically the only thing he brought with him to the hospital.

The nurse told me it was common for older patients to reach into their distant past for memories they cherished. It was curious to me because he had never talked about his days in the war, nor his friends from that era. Now, he could recall each one’s name, hometown, hair color, and laugh.

My Uncle and I rarely agreed on anything political, but we both enjoyed the banter and ribbed each other about our candidate choices. It was a familiar rift, not a hostile one. The year was 2001. 9-11 had not yet happened and George Bush was president. When Uncle Rob was not talking about his long-disappeared friends, he encouraged me to reconsider our new president.

"Well, I’m concerned that he would use nuclear weapons," I said. That stopped Uncle Rob cold. And then he looked at his war photos and shook his head. “Unacceptable,” he said. “We weren’t trained for that. Fight, yes. Die, maybe. But a nuclear bomb would get us all. Allies, enemies, animals, land, everything. It just wouldn’t be fair.”

As we honor our veterans this Veterans’ Day, we embrace the prospect that the U.S. Senate will a strong step toward ensuring that many of the world’s nuclear weapons are never used. New START, a treaty between the U.S. and Russia, should be voted on before the end of this post-election Senate session. In September the Senate Foreign Relations Committee approved New START with bipartisan support. Now the treaty is ready to be considered and voted on by the full Senate. The original, fifteen year-old START treaty, initiated by Ronald Reagan, expired in December 2009. For almost one year, there have been no on-site inspections of Russia’s large nuclear arsenal. New START must be promptly ratified by the full Senate in order to reestablish inspections. This is vital to a transparent and stable relationship with nuclear – armed Russia.

As a veteran, my uncle, patriot to his dying day, and honoring his fighting partners, knew without question that using a nuclear weapon would be wrong. Therefore, it should be no surprise that New START has the unanimous support of the United States military.

It's not just the military that supports the treaty. The Senate heard testimony in favor of the treaty from Republican national security heavyweights like James R. Schlesinger, George Shultz, James A. Baker III, Henry Kissinger and Brent Scowcroft. An open letter in support of the treaty was published from 30 former national security officials from both political parties - including Colin L. Powell, Frank C. Carlucci, Madeleine K. Albright, Chuck Hagel, and John C. Danforth.

Immediately after this midterm election, the President announced his support for the post-election session to approve the treaty. “This is not a traditionally Democratic or Republican issue, but rather an issue of American national security I'm hopeful that we can get that done … and send a strong signal to Russia that we're serious about reducing nuclear arsenals, but also send a signal to the world that we're serious about nonproliferation."

The recent election demonstrated a clear desire by voters for bi-partisanship. New START would be a huge step to show the country that Republicans and Democrats can work together for the good of the country and the world.

The United States Senate can validate veterans with this vote. I know my Uncle would love to know that the country he and his buddies fought for understands that ratification of New START is good for American security, improves international stability, supports the fighting soldiers, and makes the entire world safer.
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Shaer is executive director of Women’s Action for New Directions, WAND, a national peace and security organization that supports the New START Treaty.
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Copyright © 2010 by American Forum. 11/10

ARIZONA EDITORIAL FORUM

By Michael Wong and Twyla Haggerty

Candidate signs are affixed on every street corner. Ballot information fills our mailboxes daily. Phone calls crowd our voice mail. And of course ads, ads, and more ads every time we turn on our favorite television show.

While Arizona voters are inundated with campaign materials and pundit speculation, the Arizona Student Vote Coalition is one group that doesn’t worry about the polls or how young people vote – we just want them to vote.

The Arizona Student Vote Coalition, comprised of the Arizona Public Interest Research Group, the Arizona Students’ Association and the University Student Governments, has been working since 2004 to significantly boost youth voting.

There are three important reasons to increase voter participation among young people. First, young people are the generation that will be most impacted by pressing issues in Arizona (the economy, college affordability and transportation). By engaging us now, it is more likely that we will be a driving force towards the solutions to these issues. Second, we are a big and growing portion of the electorate (nearly 25 percent in 2008) and as such we have the potential to make big impacts on these issues. Third, youth voting habits are formed early, so getting more young people to vote now results in a more active citizenry for the future.

Although some cynics believe that young people don’t care about anything but themselves and their electronics, the facts show otherwise.

In 2004, young voter turnout surged nine percent, an increase three times that of the general population. In 2006, the youth vote increased again -- growing by two million votes. In 2008, the number of voters under 30 who showed up at the polls increased by approximately 11 percent, while the number of older voters who cast a ballot increased by only three percent. Young people as a percentage of overall turn-out in Arizona increased on both sides of the aisle in 2008 over previous levels (Republicans – 12 percent in 2008 from 10 percent in 2000; and Democrats – 10 percent in 2008 from seven percent in 2004).

Yet, even with these encouraging increases in turnout, overall youth voter turnout still remains too low.

Studies suggest that a large-scale peer-to-peer effort of voter contact targeted at young people can make a significant difference in the turnout rate of young voters.

Putting that research into practice, in the months leading up to the election, hundreds of students have reached out to peers on college campuses across the state to register them and get them to vote on Election Day. We have helped bring together a large, diverse coalition of partners – from the College Republicans and Young Democrats, to fraternities and sororities. We are speaking in classrooms, storming the dorms, and holding events to make sure young voters in Arizona show up on Election Day.

As the campaign season becomes more polarizing the closer we get to Election Day, one unifying message we hope all Arizonans will promote is that young people (and others) need to vote!
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Wong and Haggerty are co-chairs of the Arizona Student Vote Coalition.
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Copyright © 2010 by Arizona Editorial Forum. 10/10

AMERICAN FORUM

By Sarah van Gelder

If you’re like me, this election doesn’t feel anything like 2008. The excitement and hope of that historic election have been replaced by worry and disappointment. The 2008 campaigns at least occasionally addressed our country's serious problems.

This year it's all noise, attacks, and accusations. Little actual policy makes it through. Meanwhile, billionaires, big oil, and Wall Street corporations unleashed by the Supreme Court decision in Citizens United are able to spend unlimited amounts of money to flood the airwaves with anonymous attack ads.

It’s a tough election season, and many Americans say they’ll be voting with their feet by staying home.

But not voting is a huge mistake. Things could get much worse, and if enough of us stay home, they almost certainly will.

The Great Recession is creating hardship for families in every part of the country. More than 6 million Americans fell below the poverty line in the last two years, and nearly a quarter of all children under the age of six are living in poverty. Unemployed workers are typically going jobless for six months, nearly twice as long as they have during any time since World War II. Median household wealth fell by 20 percent since 2007, retirement savings have evaporated, and now some are talking about dismantling Social Security.

This is not the year to stay home. Our families can’t afford it.

Democracy is especially fragile during times of stress. It’s a time when our commitment to build a more perfect union is tested.

Voting alone isn’t enough, but it does make a difference. We may not be able to directly influence big corporations to create jobs at home (or at all), but we can elect leaders who will press for jobs in our communities. We may not be able to force employers to offer pension benefits, but we can elect leaders committed to protecting Social Security. And maybe we can’t bring down the high cost of college tuition, but we can vote for members of Congress who will support Pell Grants and other means for young people to gain the skills they’ll need to find work and build a strong country for the next generation.

Elections aren’t everything. Frankly, Congress has fallen short many times, and it is bound to disappoint us again. If we want better policies, we have to do more than vote. We have to get organized, develop our own agenda, and hold our elected officials at all levels of government accountable to us. We’ll need to organize in our communities, work places, and political districts to counter the influence of big-money special interests and the media they control, and set a course that will protect and support strong families.

Voting isn’t everything, but when combined with organizing outside the political process, it can be powerful.

If we work together, we’ll be able to create green, family-wage jobs that stay in our communities. We’ll protect social security and assure our veterans get the long-term help they need. We’ll rebuild our failing schools, divert our young people away from the “cradle-to-prison” pipeline, combat discrimination against women, gays and lesbians, people of color, and ex-felons, and restore a sense of possibility for everyone’s future.

Voting alone won’t accomplish all of this – it’s just the beginning. A democratic system isn’t something delivered to us by politicians. It’s ours to remake with each generation—as the saying goes, “Use it or lose it.”

Don’t be discouraged by the cynicism of television pundits, the negative advertising, and the bad economy. Vote for the country you hope for—and then go out and help build it.
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van Gelder is co-founder and executive editor of YES! Magazine, www.yesmagazine.org, an independent media organization that fuses powerful ideas with practical actions for a just and sustainable world. The Winter 2011 issue of YES! features a pro-family political agenda, and other stories about how American families are surviving, and even thriving.
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Copyright (C) 2010 by American Forum. 10/10

AMERICAN FORUM

By Holly Sklar

Before Wall Street drove our economy off a cliff, bullish Citigroup strategists dubbed the United States a "plutonomy." They said, "There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. There are the rest, the 'non-rich,' the multitudinous many, but only accounting for surprisingly small bites of the national pie."

Inequality had increased so much since the 1980s, Citi strategists noted in 2005, that the richest 1 percent of households and the bottom 60 percent had "similar slices of the income pie!" Even better, they said, "the top 1 percent of households account for 40 percent of financial net worth, more than the bottom 95 percent of households put together." And the Bush "administration's attempts to change the estate tax code and make permanent dividend tax cuts, plays directly into the hands of the plutonomy."

In "Revisiting Plutonomy: The Rich Getting Richer," Citi strategists considered the risk of backlash. "Whilst the rich are getting a greater share of the wealth ... political enfranchisement remains as was - one person, one vote," they said. "At some point it is likely that labor will fight back against the rising profit share of the rich and there will be a political backlash against the rising wealth of the rich." This could be felt, for example, "through higher taxation (on the rich or indirectly though higher corporate taxes/regulation)."

Fast forward. Wall Street wrecked the economy and was bailed out by the rest of us. "Pay on Wall Street is on pace to break a record high for a second consecutive year," the Wall Street Journal reports. Main Street, meanwhile, suffers record high foreclosures speeded by robo-signers.

Big businesses have a record amount of nearly $2 trillion in cash and are borrowing money cheap to buy other companies, buy back stock and pay out more dividends. Small businesses can't get credit to buy more equipment or hire more workers.

According to the latest IRS data, the 400 richest taxpayers increased their average income by 399 percent, adjusted for inflation, between 1992 and 2007, and lowered their effective income tax rate by 37 percent - from 26.4 percent to 16.6 percent.

This year, the Forbes 400 richest Americans, all billionaires, enjoyed an 8 percent rise in their wealth - while more than one out of eight Americans depends on food stamps.

The backlash is here, but it's lashing in the wrong direction.

The anti-government Tea Party rage plays directly into the hands of the Kings of Wall Street.

Wall Street has already voted, pouring money into Republican campaigns and anti-Democratic ads by astroturf groups that don't have to disclose their Big Bank, Big Oil, Big Business donors. "Our target ratio for the 2010 cycle is 80-20 Republican," American Financial Services Association representative Karen Klugh told Politico.

Wall Street expects a good return on their investment. "Wall Street is preparing for a Republican surge in Congress that could help it block proposed taxes on banks and investments, blunt new financial regulations and regain some of the lobbying firepower it lost during the financial crisis," Bloomberg reports. "Banks would prefer to have Republicans overseeing the regulators, lobbyists said."

Wall Street wants freedom to gamble with our money - including the Social Security funds Republicans want to try again to privatize.

"The Republican agenda could also give new life to free-trade agreements with Colombia, Panama and South Korea," Bloomberg reports. That's good news for the plutocrats. As Citigroup said in 2005, "Globalization is making it easier for companies to either outsource manufacturing (source from cheap emerging markets like China and India) or 'offshore' manufacturing (move production to lower cost countries)."

Average wages are 7 percent lower today, adjusted for inflation, than they were back in 1973. Do you want to go lower?

The richest 1 percent has more wealth than the bottom 95 percent combined, but just 1 percent of the vote.

Wall Street plundered your livelihoods, homes and retirement funds - and now they want you to bail them out, again, with your vote.

They want to sell you bait-and-switch candidates like they sold you bait-and-switch mortgages. And laugh all the way to the bank.

Wall Street has voted. It's your turn.
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Sklar is author of "A Just Minimum Wage: Good for Workers, Business and Our Future" (www.letjusticeroll.org) and "Raise the Floor: Wages and Policies That Work for All of Us." She can be reached at hsklar.writer@gmail.com.
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Copyright (C) 2010 by American Forum. 10/10

TENNESSEE EDITORIAL FORUM

By Jennifer Tlumak

You’ve clicked and scrolled and finally found that perfect something online. From books and clothes to furniture and appliances, pretty much whatever you want can be found from web retailers.

You virtually “check out” and notice the fine print at the bottom of your computer screen, which reads something like: “Colorado residents must pay 6.5 percent tax.” And you breathe a sigh of relief thinking, “Sure glad I live in Tennessee!”

Your Internet deal turns into a steal when you get away without paying a cent in sales tax. It seems like a win-win, but there’s a loser in this game, and ultimately, it’s you, me, and the state of Tennessee.


Click here to read the full article.

NEW MEXICO EDITORIAL FORUM

By Lilia Diaz

When hundreds of private investors came together at the 2010 Investor Summit on Climate Risk (INCR) in New York this past January, they weren’t there to debate the existence of global climate change or humans’ role in causing it.

They were there to talk about how to address the negative environmental impacts of the current climate crisis, while at the same time turning it into an opportunity for creating jobs and making money.

The private investors who belong to the INCR are increasingly embracing a reality that seems to elude Washington D.C. – investing in renewable and clean energy industries is the next crucial step towards digging ourselves out of this economic abyss and building a sustainable world economy.

The “2010 Investor Statement on Catalyzing Investment in a Low-Carbon Economy” demonstrates that what these investors are demanding is nothing short of bold leadership and clear policy decisions which pave the way for their investment in these industries.

Washington’s inexplicable failure to act on this issue by enacting comprehensive climate change legislation has placed New Mexico in the position of needing to advocate for itself. If New Mexico doesn’t take proactive steps to address the statewide spectre of carbon emissions now, then we run the risk of missing out on millions of investment dollars which could flow into our struggling economy. Other governments around the world are jockeying to take advantage of these opportunities, so New Mexico must act quickly to establish itself as a leader in the clean, renewable energy market.

Predictably, the measures needed to address climate change and jump-start economic revival have met fierce resistance from the oil, gas, and coal industries, and their army of lobbyists who have resorted to fear tactics to mislead and confuse consumers.

A local energy industry spokesperson and other opponents testified against New Energy Economy’s (NEE) petition to cap greenhouse gases at the August 16th Environmental Improvement Board hearing in Santa Fe. They issued dire warnings that NEE’s proposal will cost too much to implement and will lose the state money. No statement could be more disingenuous.

Contrast the industry’s alarmist arguments with the fact-based assessment of Brendan McDonagh, CEO of HSBC-North American Holdings, Inc. McDonagh reported that the climate business sector now generates annual global revenues in excess of $500 billion, which is already larger than the global aerospace and defense industries. Moreover, these revenues are expected to rise to $2 trillion by 2020.

Now that’s the kind of “green” that should be going into the pockets of consumers and businesses in New Mexico.

New Mexico must pave the way for companies who want to invest in renewable energy and who want to do it here. Our state ranks 2nd in the nation for solar potential, 12th for wind potential, and boasts vast untapped geothermal and biomass resources. With all of this raw potential, we could lead the nation in clean, affordable, renewable energy production.

Capping carbon will benefit New Mexico by expanding and diversifying our energy resources. Sandia National Labs recently released a report which estimates that the cost of inaction will be much higher than that of implementing carbon cap measures.

Study co-author George Backus, an energy engineer and technical expert at Sandia, says the take-away is that “the uncertainty associated with climate change validates the need to act protectively and proactively.”

Regulation is a policy signal, which acts as an economic stimulus by spurring investment, research and development in renewable energy and energy efficiency. Mindy Lubber, President of Ceres and Director of INCR (the group has more than 90 members and $13 trillion in assets), highlighted that the financial industry has a huge role to play in closing the climate investment gap, and that there is a great need for policy change beyond financing the transition to a low-carbon economy.

NEE’s petition has rallied strong support from the business community and advocacy organizations around the state, many who are co-petitioners, and offered compelling testimony at the August 16th hearings. The New Mexico Pediatric Society, League of Women Voters NM, Amigos Bravos, Positive Energy, San Juan Citizen’s Alliance, and Rocky Mountain Youth Corps, to name a few, demonstrate the broad range of organizations that support a carbon cap as part of what is nothing less than an energy paradigm shift.

According to the world’s top investors, the switch to a clean energy economy is not a matter of if, but when.
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Diaz is the education and outreach director for New Energy Economy. The hearings resumed on October 4th in Santa Fe. The 2010 Summit Final Report can be found at http://www.incr.com/summit and the Sandia report at https://cfwebprod.sandia.gov/cfdocs/CCIM/docs/Climate_Risk_Assessment.pdf
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Copyright (C) 2010 by American Forum. 10/10

GEORGIA FORUM

By Howard H. Johnston

In 40 years of practicing law, I have never seen such a misleading ballot question or such an unfair proposal as Constitutional Amendment No. 1.

Amendment No. 1 represents an attempt to control the employer-employee relationship in a manner previously unknown in Georgia. It will legalize unfair employment contracts, saying, “If you leave this company for any reason, you cannot work in this town (or several counties or states) for a period of two years.”

If passed, this amendment will allow an employer to force an employee to sign a contract which would create a modern form of involuntary servitude.

Amendment No. 1 deceptively states:

“Shall the Constitution of Georgia be amended so as to make Georgia more economically competitive by authorizing legislation to uphold reasonable competitive agreements?”

“Reasonable competitive agreements” are already upheld in Georgia. As the law stands today, you are protected from unreasonable employment covenants by the Georgia Constitution, which says that contracts that have the effect of “defeating or lessening competition” are unlawful and void. Our Constitution favors an open market and encourages free competition.

Accordingly, the Georgia Supreme Court has routinely refused to enforce contracts which unfairly restrict an employee’s opportunities. Our courts enforce post-employment contracts only where the provisions as to time, territory and the prohibited employment activity are reasonable. Georgia courts refuse to enforce any such contract where any of these elements are unreasonable. That means that judges refuse to “blue pencil” or redesign an unreasonable contract to make it enforceable against a former employee. The responsibility to develop a reasonable employment agreement currently is on the employer.

Amendment No. 1 would change all of this, making judges responsible for re-writing sloppy employment contracts, thereby overburdening the courts, increasing litigation, and allowing precedent to vary from county to county, courtroom to courtroom.

If this amendment is adopted, the next time you change employers or decide to go into business for yourself, you may not be able to do the same work for two years after you leave your present job, in an area as large as several states, because the employment agreement you signed says you cannot compete with your former employer. This agreement can apply to almost any type of private employee, including doctors, nurses, engineers, technicians, specialists, account representatives, real estate agents, executives, managers and wage earners. And, it doesn’t matter why you left your job -- whether you were “downsized,” or voluntarily left for more pay and opportunity, or left to avoid inappropriate behaviors at work.

Some businesses want to stop their employees from practicing their skill and trade for any other corporation, and require their employees to sign non-compete covenants as a condition of employment. As a result, when things don’t go well at work, the employee’s options can be severely limited. These businesses, represented by powerful and influential lawyers, have suffered embarrassment when the courts have held some contracts unenforceable and allowed former employees to compete. Now these businesses and their lawyers want to tilt the playing field in their favor.

Reading the complete proposed law is a challenge, even for an attorney, but consider this language found deep within the text: “If any portion of such restraint is against the policy of the law in any respect but such restraint, considered as a whole, is not so clearly unreasonable and overreaching in its terms as to be unconscionable, the court shall enforce so much of such restraint as it determines by a preponderance of the evidence to be necessary to protect the interests of the parties that benefit from such restraint.” These words, if passed, would require a former employee to go to court to see if he can compete against his former employer. Such an amendment would drastically tilt the playing field against the former employee who merely wants to make a living.

This amendment mandates judicial activism and interferes with competition and free enterprise. There are already laws in place to protect trade secrets and solicitation of customers. This outrageous amendment opposes fundamental fairness and equality before the law. Vote no on Amendment No. 1.
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Johnston is an attorney in Norcross.
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Copyright (C) 2010 by Georgia Forum. 10/10

MISSISSIPPI FORUM

By Lynn Evans

For anyone planning to vote in the November elections, “The Big Short” by Michael Lewis should be required reading.

Author of “The Blind Side,” on which the Oscar-winning film was based, Lewis went to Wall Street to try to understand the causes of the great Subprime Mortgage Meltdown of 2007-2008 and the resulting government bail-out that has so angered the American public.

As Lewis makes clear, there were few people who understood what was happening inside the world of mortgage investments, but they were not the people in charge of either the investments themselves or the government and ratings oversight agencies that were supposed to protect ordinary consumers.

The story begins with the Shadow Banking Industry that sprang up after banking deregulation during the Reagan years. Local banks no longer hold the mortgages in their communities like Jimmie Stewart’s bank did in “It’s a Wonderful Life.” They sell them to bigger banks based on what money can be expected to be earned in the future, given the credit worthiness of the borrower and the worth of the property. Since ordinary families’ incomes have not kept up with inflation over the past two decades, refinancing to get the equity out of their homes has been the way many Americans have chosen to maintain their standard of living or pay off big expenses. This lending was based on the assumption that housing prices would always go up and Americans would always pay their mortgages. Therefore investing in mortgages was, as the British say, “safe as houses.”

Wall Street investment banks figured out that they could “bundle” these individual mortgages and sell them as big investments, again based on the assumptions that housing prices would always go up and never go down, and that mortgages were based on real worth. The bundled investments were called Mortgage Bonds, and they were highly rated by Moody’s and S&P. The SEC concluded this month that Moody’s, at least, used a flawed ratings model in calculating how safe these mortgage bonds were.

According to Lewis, most of the bond raters had no idea what was even in the mortgage bonds they were rating AA and AAA. They, too, were sold on the notion that the bonds were all “safe as houses.”

Seeing what great money they were making off mortgage bonds, investment banks realized they could create even more bonds by inserting more and more subprime loans into their big bundles of mortgage loans. This sent eager local agents out scurrying for borrowers, resulting in some of the unbelievable stories Lewis relates like the New York nanny with five mortgages. The eventual result was that banks all over the world owned mortgage bonds consisting of more and more subprime mortgages presented as solid investments.

In the end, too few of the investment bankers and hedge fund managers who created the feeding frenzy that led to the subprime meltdown were held accountable for their actions. Under the bail-out program set up by Bush, Treasury Secretary Henry Paulson used money from Congress to prop up the biggest investors in the subprime business, like AIG and Citigroup. And, as we all know now, too many of those institutions turned around and paid huge bonuses to the very employees who either dreamed up the increasingly exotic mortgage instruments or ignored their risk.

The American people need and deserve a federal government that has the enforcement power to make sure everyday people are not made the dupes of the big banks and corporations whose one purpose is to make lots of money. We need to stop blaming government for creating a crisis which was in fact created by a lack of government oversight. And for those who don’t get that yet, the assigned reading is “The Big Short.”
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Evans is an activist and writer.
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Copyright (C) 2010 by Mississippi Forum 10/10

OHIO FORUM

By Wendy Patton

The American Recovery and Reinvestment Act of 2009 cut taxes for businesses and households, boosted safety net services for the eight million who lost their jobs, and jump-started job creation.

Midway through the three years of Recovery Act programming, a little more than half of the money has been awarded. Policy Matters Ohio took a look at how the state is faring in getting and spending the money in the categories of energy and the environment. So far, the news is good.

The Recovery Act allocated over $100 billion to jumpstart job creation in energy and the environment. Companies, schools, agencies, universities and individuals across Ohio jumped on the opportunity. A billion dollars have already been awarded here and Ohio ranks seventh in getting the money out on the streets, with more awards coming every week.

Funded projects have created jobs in construction as workers have been hired to upgrade housing and buildings for energy efficiency. Close to 19,000 homes have been weatherized, creating over 2,000 jobs. A water treatment plant in Wilmington will be powered by solar panels, cutting water bills for residents. A jail in Wood County will get new and more efficient boilers, lowering costs. Homes will receive smart meters, allowing customers to monitor their own energy use. Clean water and sewer projects have been built throughout the state, employing construction workers in repairing or expanding infrastructure. Nuclear sites are being cleaned up. Factories have received tax credits to start new lines and to develop new clean energy products. Demand for manufactured goods for these projects -- from insulation, windows and solar panels to industrial sensors and controls -- has pulsed through Ohio’s industrial base, boosting orders and creating factory jobs.

We found these projects in all counties and in towns and cities of all sizes. Funding has reached the places hardest hit by the recession, as mandated in the legislation. Using a formula that adds poverty and unemployment rates in each county to measure economic distress, we divided the 88 counties into four equal groups (quartiles) based on economic conditions. The 22 counties with the weakest economies received the highest per-
capita funding of $172 per resident in the categories of clean energy and the environment, almost double the state average.

The second largest per-capita funding of $79 went to counties with moderately lagging economies. The third quartile, made up of counties with moderately strong economies, received a per-capita average of $73. The fourth quartile of counties, with relatively strong economies, received $60 per resident. Distribution of Recovery Act funds in clean energy and the environment reached all counties in a way that provided most to the neediest places.

The short-term mission of the Recovery Act of providing relief to workers, families and communities struggling with the recession, is being fulfilled, while the long-term national economic strategy is being addressed at the same time.

The international market for clean energy investment is immense. By 2020, clean energy will be one of the world’s biggest industries, totaling as much as $2.3 trillion. Our international competitors have integrated national policies to build their own domestic clean energy companies and capture market share in global markets. Spain and Germany, major contenders in green markets, invest heavily in companies that make products for clean energy generation, but also mandate a transformation to renewable sources. China, the world’s largest supplier for these markets, provides incentives for firms from around the globe to come and manufacture clean energy products there, and also has national goals to shift domestic energy supply to renewable energy sources. The only policy employed by our federal government here is the funding under the Recovery Act, and Ohio is doing well in grabbing that opportunity.

In the short run, Ohio has benefitted from Recovery Act support of clean energy and the environment. Funding has reached all counties and has helped those places most hurt by the recession. In the long run, a foundation is being laid for a competitive manufacturing base that can compete in global clean energy markets. It’s a good deal for Ohioans.
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Patton is a senior associate at Policy Matters Ohio.
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Copyright (C) 2010 by Ohio Forum. 10/10

Todd Swanstrom

MISSOURI FORUM

By Todd Swanstrom and Chris Krehmeyer

It has recently come to light that lawyers processing the paperwork for foreclosures have been signing 10,000 or more documents a month without even reviewing them for accuracy and proper documentation. They are called robo-signers. Facing the threat of lawsuits for wrongful foreclosure, a number of the largest banks and servicing companies have suspended foreclosures until these problems are resolved.

Chris Krehmeyer

Instead of slowing down, the foreclosure crisis is speeding up and Missouri’s economy is being dragged down. About 11 percent of first-lien mortgages in Missouri are either delinquent or in foreclosure and 15 percent of mortgages are “underwater,” meaning homeowners owe more on the mortgage than the property is worth.

Everybody pays for foreclosures, not just those who are kicked out of their homes. Research has demonstrated that each foreclosure drives down the market value of properties located within one-eighth of a mile of a foreclosure by about 1 percent. The Center for Responsible Lending estimates that by 2012 Missouri property values will have dropped by approximately $7.3 billion as a result of foreclosures.

So while local governments are losing property tax revenue they are also forced to bear increased costs of processing the paperwork, cutting the grass for vacant properties, and even demolishing vacant structures. The Joint Economic Committee of the U.S. Congress estimates that it costs municipalities $19,227 per foreclosure.

Fortunately, skilled foreclosure counselors can prevent many foreclosures. The Public Policy Research Center at the University of Missouri-St. Louis studied 1,460 homeowners who were counseled by Beyond Housing, a St. Louis housing nonprofit. Even though most came to counseling facing a foreclosure, the study found that 84 percent were still the owner of record at the end of the study period. A national evaluation of the federally funded counseling program by the Urban Institute compared 60,892 households that received counseling with 60,892 households that did not. Households receiving counseling were 60 percent more likely to avoid foreclosure compared to those who did not.

Olga Povarich’s story is typical. An upbeat, high-energy woman, Olga came to St. Louis from the Ukraine in 1993. She works for a home health care company and cleans homes on the side. When her husband left the family, she could not keep up with the mortgage payments for the home she shares with her three children. Her lender initially told her, incorrectly, that she was ineligible for a loan modification and repeatedly lost her paperwork. Working with Beyond Housing, Olga was able to finally get a loan modification under the federal Making Home Affordable program that limited her housing expenses to 31 percent of income.

Unfortunately, Olga’s happy ending is the exception rather than the rule. Loan servicers are rushing to complete foreclosures, repeatedly losing paperwork and refusing to negotiate loan modifications to keep families in their homes.

What’s the solution? The foreclosure process in Missouri needs to be slowed down in order to make sure the paperwork is correct so we can find ways to keep as many families as possible in their homes.

Missouri has the fifth-fastest foreclosure process in the nation. Our “non-judicial” foreclosure process is not regulated by the courts, as it is in Illinois, where the process is finalized by a judge. Missouri’s process does not provide enough time to negotiate solutions that will prevent families from being pushed out of their homes.

Missouri should immediately declare a 60-day moratorium on foreclosures. During this period, local governments should establish foreclosure mediation programs, like those in Philadelphia, PA and Providence, RI. Under voluntary mediation programs, homeowners can choose to meet with their lender before a trained, neutral mediator to see if a way can be found to avoid foreclosure.

Foreclosure mediation can help homeowners and lenders find win-win solutions. By keeping the mortgage payments coming in and preserving the value of the home, loan modifications are often in the interest of the investor, as well as the homeowner. If the mediator concludes that no mutually agreeable solution can be worked out, then the foreclosure can proceed.

A foreclosure moratorium attached to voluntary mediation is the right and smart thing to do.
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Swanstrom is the Des Lee Professor of Community Collaboration and Public Policy Administration at the University of Missouri-St. Louis. Krehmeyer is the President and CEO of Beyond Housing.
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Copyright (C) 2010 by Missouri Forum. 10/10

NEW MEXICO EDITORIAL FORUM

By Margarita Mercure Hibbs

Living in rural regions supports a lifestyle that many families, small businesses and retirees appreciate. However, securing access to affordable, quality health care -- especially during a recession -- can be a challenge. With roughly one-third of its 2 million residents living in rural areas, New Mexico has an especially severe challenge.

According to studies by the Rural Health Research & Policy Center, the Flex Monitoring Team, and Kaiser, there are 42 hospitals in New Mexico, only 29 of which are located in rural areas, and six of which are critical access hospitals.

What does this mean for rural New Mexicans? These numbers show that although they occupy the largest geographical territory in the state, folks in rural New Mexico only get about half the medical resources. These statistics are devastating to our state and are completely unsustainable.

Adding to the special challenges facing New Mexicans is the fact that our state has some of the highest unemployment and uninsured rates in the nation. The rural-urban disparity in insurance coverage is exacerbated by the fact that incomes are generally lower and fewer rural companies offer private health insurance.

These special challenges are why the changes brought about by the Patient Protection and Affordable Care Act are so important to New Mexicans. The Act addresses many of the health care issues that so many rural Americans face and ensures that they will now have affordable access to necessary health care that was once unavailable to them.

Historically, rural New Mexicans faced with catastrophic injuries or illnesses have had a greatly diminished chance of survival due to the lack of emergency, urgent care, and first responder resources.

The Patient Protection and Affordable Care Act creates a system that is fair for rural communities -- one that will grow rural health care workforces by making necessary investments in training, recruitment and facilities, so that rural populations have greater access to doctors, nurses, dentists and paramedics.

Health care reform sets important guidelines which address the care of our most vulnerable members of society. Under the Act, people with pre-existing conditions, children and youth, small businesses and seniors will be the first groups to directly benefit.

Beginning in 2104, insurance companies will finally be held accountable and may no longer refuse coverage to a person simply because he or she has a medical history. Until then, a pre-existing condition insurance plan serves as a bridge to meet the needs of those individuals who have already been denied insurance coverage and have been uninsured for at least 6 months.

Children can’t be denied coverage for any reason and family coverage will be extended for young adults through the age of 26.

Seniors, who have fallen into the prescription coverage gap (the “donut hole”) since 2007, will receive assistance with paying for medications, and will also have access to cheaper ones.

Most importantly, everyone will also have greater access to preventive care, which will help avoid expensive and unnecessary treatments later.

Establishing a fair playing field for small and independent businesses is a key component of reform. In New Mexico, agriculture and tourism are cornerstone industries – related small businesses contribute greatly to the economy. But typically, in rural areas, one large insurance company dominates the market, so there is no guarantee of choice or competitive pricing.

To remain viable, these small businesses must be able to attract and keep good employees by being given the opportunity to provide health insurance (large corporate businesses currently pay, on average, 18 percent less for comparable insurance plans). In the past, only 35 percent of small business owners were able to offer health insurance to their employees, but this year, more than 88.9 percent of New Mexico small businesses (24,800) with fewer than 25 employees will be eligible for tax credits to help pay the cost of necessary employee health insurance coverage.

Many New Mexicans are already benefiting from reform. Health Action New Mexico, a statewide health advocacy organization, provides information to folks in order to better explain what the health care plan does and doesn’t do. Access to this information is an important piece of reform, so we strongly encourage you to contact them directly at www.healthactionnm.org or (505) 867-1095.
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Hibbs is a rural advocacy specialist and former first lady of Estancia.
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Copyright (C) 2010 by New Mexico Editorial Forum. 10/10

MINNESOTA EDITORIAL FORUM

By Beverly Caruso

There’s heated debate over whether to extend the Bush-era tax cuts for families with incomes over $250,000.We’re hearing the argument that letting the high-end tax cuts expire will hurt business. Yet I’ve seen first-hand how well-designed tax policy is critical for spurring innovation and business development. It plays a very different role than the anti-tax crowd leads us to believe.

CyberOptics, a leading high-tech company in the area of electronic inspection, was founded by my husband, Steve Case, in 1984, and now employs 180 people in Minnesota and around the globe. How this business came about tells a very different story about the role of our tax dollars – and the public investments they support - in job creation. This is an important story to tell if we want to recreate the fertile ground that allows new companies to start up and become successful, sustainable job creators.

Steve was a physicist and entrepreneur, whose education was financed totally by National Science Foundation grants and scholarships. Later, as a young professor he would again gain our government’s support through a Fulbright Scholarship. The scholarship led us to Germany where Steve deepened his scientific knowledge and met executives in Europe who would become major clients of his new business. Steve always said that fellowship year had a profound impact on his creativity, confidence, and skills. As a professor at the University of Minnesota, his partnership with a government contractor made it possible to conceive of and establish CyberOptics.

Every step of the way, programs funded by our tax dollars paved the way for Steve and CyberOptics’ success. The return on our tax dollars through these investments has been high.

While it’s easy to think that companies like Google and Sun Microsystems are the result of one or two people with the intelligence, creativity, and entrepreneurial spirit to take a risk and win big, the truth is more complex.

Like CyberOptics, these businesses rely on the court systems that enforce patent and copyright laws, roads, railroads and bridges that bring raw materials and deliver finished product, as well as the research and development grants to institutions of higher education, the high-quality primary and secondary public schools that educated generations of American students, and the grants and scholarships to those students during college and graduate school.

I would argue that the reason the United States has been so economically successful since the 1940s, is the combination of regulated capital markets and thoughtful, well-funded public institutions and structures. Steve’s story, like the story of so many American entrepreneurs, illuminates the role that public investment and public institutions play in creating the small companies that are the job engines we so desperately need.

Our country’s problems are large and complex, and we must attend to them now and cease putting them off. According to a report by Wealth for the Common Good, between 2001-2008, tax cuts for the wealthy cost the U.S. Treasury $700 billion, directly adding to the national debt. Retaining these tax cuts will likely cost another $700 billion over the next decade.

One thing we can do is to tell Congress to let the Bush-era tax cuts on the wealthy expire this year. The rise in incremental tax rates on people like me would be modest but the $700 billion in savings over 10 years would be a wonderful investment in the next generation. For those who have benefited enormously from our country’s investment, it’s time to share that opportunity with others. Letting tax cuts for the wealthy expire at the end of 2010 is a good and necessary first step.
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Caruso is a psychotherapist, community volunteer and civic leader in the Twin Cities. Her late husband, Dr. Steven Case, is the founder of CyberOptics, a high tech firm in Minnesota. Dr. Case was killed in a plane crash in June 2009.
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Copyright © 2010 by Minnesota Editorial Forum. 10/10

AMERICAN FORUM

By Peter Heegaard

Congress should do the responsible thing and let tax cuts for high earners expire at the end of this year.

As someone who has benefited from these tax cuts, I believe we must restore balance to a federal tax system that has been tilted in favor of the wealthiest 5 percent for a generation.

I’ve had a lifelong interest in the vital role of social entrepreneurs, the local heroes who take risks to lead innovative nonprofit organizations to solve problems at the local level.

I’m a big believer in the importance of mentorship, of helping the next generation of business and community leaders find their way.

But I also view efficient government and adequate tax revenue as essential ingredients in a fostering the fertile soil for business development and healthy communities. Just as a healthy farm or garden needs a balance of nutrients, our country needs a balanced and fair tax system.

Yet the overheated anti-tax rhetoric is alarming. There are loud voices that will object to any tax and claim that raising taxes on higher income people will destroy economic growth and punish success. They argue that we don’t need additional revenue, that we can simply reform entitlements, cut spending and root out waste.

We should obviously press for greater government efficiency and accountability. But it is irresponsible to suggest that we can proceed without increasing tax revenue. No gardener or farmer would expect their crops to grow year after year without regular additions of fertilizer.

We have racked up over $13 trillion in national debt, thanks to borrowing to pay for two wars and a decade of tax cuts. Yet, we have long overdue investments in education, reducing our dependence on foreign oil, and public infrastructure, such as roads, bridges, broadband access, and market protections. Where will the money come from?

Generous tax cuts for the wealthy, passed by Congress in 2001 and 2003, are due to expire at the end of this year. Between 2002 and 2009, households with incomes of over $250,000 received more than $700 billion in tax cuts, according to the Center on Budget and Policy Priorities. This was essentially added to our national debt.

The higher income people I know didn’t lobby for these original tax breaks and recognize the need to allow them to expire. If we retain these tax cuts, we’ll add another $700 billion to the debt over the next decade. These are funds better spent in deficit reduction and targeted investments.

The retired business leaders I serve with on community boards are thankful for the opportunities we’ve had to do business and grow wealth in this remarkable nation and free market economic system. None of us exist on an island and no wealth can be created without a society that provides a fertile ground of opportunity for everyone.

In the 30 years after World War II, 1947 to 1977, we taxed ourselves at significantly more progressive tax rates than today. The highest earners paid twice as much of their income in taxes in 1960 as they do today, according to a new study by Wealth for the Common Good. With that money we made investments in public infrastructure, affordable homeownership and expanded education at all levels. These far-sighted leaders supported policies that propelled millions of Americans into the stable middle class.

Today, young people are graduating from college with $100,000 in school debt, as undergraduates. We’re coasting along on previous generations’ investments in water treatment facilities, bridges and other essential infrastructure -- and we’re leaving too many talented young people behind. Our failure to make investments today will undercut prosperity for the next generation.

Congress will be under tremendous pressure to continue providing tax breaks to high income groups. Let’s hope they have the fortitude to let mine expire. The fertility of our economic soil depends on it.
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Heegaard is retired from banking and a former Managing Principal of Lowry Hill, a subsidiary of Wells Fargo. He is founder of Urban Adventure and author of “Heroes Among Us: Social Entrepreneurs Strengthening Families and Building Community” (Nodin Press).
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Copyright (C) 2010 by the American Forum. 10/10

AMERICAN FORUM

By Susan Shaer

The partisan split in politics is getting old and stale. Real people want real solutions to real issues, and one of the gravest is within our grasp to solve. For decades, we have been under a nuclear cloud, but world and U.S. leaders have risen to the occasion to provide safeguards.

The United States and Russia maintain over 90 percent of the world’s nuclear arsenal of some 23,000 nuclear weapons. The original Strategic Arms Reduction Treaty (START) between our two countries that has provided for inspections and monitoring of these weapons expired nearly a year ago. The Senate now must ratify the New START treaty by a 2/3 margin (67 votes) to preserve the security protections of on-the-ground intelligence we have relied upon.

You may well ask what is taking our Senators so long? Sometimes the only solutions can be provided by government at the highest levels. The old START treaty was backed by Ronald Reagan, Bush I, Clinton. and now President Obama backs New START. Kennedy and Nixon supported efforts to curb nuclear proliferation. Bush II relied on START verification issues for his treaty between the United States and the Russian Federation on Strategic Offensive Reductions (SORT), better known as the Moscow Treaty. The mandate for strategic arms reduction appears to be bi-partisan and firm.

With such mighty support from the presidential level, why the delay? Nine months without a treaty? Nine months without safeguards and verification?

Legitimate questions have been asked and answered through 21 open and classified hearings. The testimony of more than 20 expert hearing witnesses has been heard, and New START has overwhelming support from across the political spectrum. Presidents and America’s military leadership (flag officers, former and current) support the treaty. Yet, Republicans are fence sitting, balking, or pushing it off.

We have now gone months without critical intelligence from on-site verification and monitoring in Russia. With the expiration of the START Treaty, our inspectors lost access to dozens of Russian sites. If the new treaty is not ratified we will lose this critical information and American national security will be at greater risk.

Failure to ratify New START would send a message of indifference to Russia and the rest of the world, voiding decades of arms control policy. Failure to ratify would be a warning sign to the world that the U.S. no longer stands behind its nuclear commitments.

Standard-bearers and negotiators for nuclear weapons controls in the United States span the spectrum from conservative to liberal. This is a subject so momentous it defies partisan politics. Or, it should.

This time, our negotiating team has the distinction of being led by very accomplished women. In decades past, Russian negotiators balked when there was a woman on the U.S. negotiating team. Today the issue for the Russians is not U.S. chief negotiator Rose Gottemoeller’s gender, it is her formidable credentials. According to the Washington Post, “one Russian military newspaper warned of the ‘danger’ in striking a deal with a woman who had run the Moscow Carnegie Center and had an ‘inside knowledge of Moscow's logic.’"

While there is the sharp partisan divide in the Senate these days, in the past Senators have left politics at the water’s edge and risen to the occasion to address pressing national security issues. The threats posed by nuclear terrorism, the proliferation of nuclear materials, and a lack of transparency and access to Russia’s nuclear weapons program is too dangerous to delay action any further.

The Senate Foreign Relations Committee passed the New START treaty on September 16th. It is now up to the whole Senate.
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Shaer is executive director of Women’s Action for New Directions (WAND), a national nonpartisan peace and security group, and national co-chair of Win Without War.
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Copyright (C) 2010 by the American Forum. 9/10