Day: October 25, 2008

Do You Really Want To Fix Main Street?

The bailout package just approved by Congress doesn’t address this problem at all. Homeowners and consumers still have the same debt, still face the same monthly payments. The only change is that the U.S. government has become a collection agent for the banks and investors.

The solution is to reduce the amount that working people owe. Reduce homeowners’ and consumers’ debt to the level it would be at if reasonable lending standards had been applied in the first place. Conservative practice is that families should pay no more than 25 percent of their income for housing. So a people’s bailout plan would mandate that mortgages be reduced so that monthly payments will be 25 percent of household income. But in no case should the debt be for more than the real value of the house, as determined by historical price levels adjusted for inflation. Credit card debt, second mortgages, and home improvement loans, college loans, and medical debt could also be adjusted by similar calculations, to a maximum of 10 percent of household income.

This would not cost the government a penny — it would force banks and investors to recognize the losses resulting from their own bad judgment and fraudulent practices. Millions of people would still be in their homes, and neighborhoods and local tax bases would be stabilized. And the financial system would be more stable because the banks could now be confident of receiving a steady stream of payments, even though these payments would be less than what they originally expected.

The proposals to revive the economy, listed at the beginning of this article, should still be adopted. The economic stimulus package that was blocked in the Senate by a Republican filibuster a few weeks ago included some of those provisions. And major reform and regulation of the financial industry is necessary; there are some excellent proposals to take over failing banks, regulate the financial industry, and tax financial transactions and exorbitant compensation to control speculation and help pay for the program. But until we clear up the massive, unfair, and often illegal debt that has been fastened on working families, it will act as an anchor dragging down the economy, and Main Street will be haunted by insecurity and misery.

Democratic leaders in Congress had a number of proposals that would have reduced the amount families owe on their mortgages. They were blocked by the Republicans, who don’t support any meaningful relief for homeowners.

Asia Readies For Bailout

Leaders of the Association of Southeast Asian Nations and the heads of their three partners China, Japan, and Korea have agreed to create an $80-billion fund by next June to avert a regional financial crisis.

“Precautionary actions are needed to send a clear and unequivocal signal that Asean is resolute and better prepared than 10 years ago when the financial crisis hit the region in 1997,” the Asean+3 leaders said in a statement after their meeting Friday morning.

The leaders agreed that the group’s finance ministers and central bank governors should set up a working group to study proposals from the Philippines and Thailand on the new regional facility that would supersede the Chiang Mai Initiative of bilateral currency swap arrangements.

Thailand, in particular, proposed to increase the pooled reserve to $350 billion, while the Philippines pushed for fewer conditions in the facility.

The purpose of the new fund is to allow a country in danger of a foreign exchange crisis to rapidly call up financial firepower by swapping its currency for those of its neighbors’.

The aim would be to sell the borrowed money in the foreign exchange market to stem pressure on the currency under attack, thus preventing a repeat of the 1997 Asian financial crisis.

The Working Poor

A report released Tuesday by the Working Poor Families Project reveals that more than 28 percent of American families with one or both parents employed are living in poverty.

The report, “Still Working Hard, Still Falling Short,” is based on data for the period from 2004 through 2006 gathered from the US Bureau of Labor Statistics, the US Census Bureau’s American Community Survey and the Census Bureau’s Current Population Survey.

The report finds that 9.6 million households can be described as low-income or “working poor”—defined as families that earn less than 200 percent of the official poverty level. There were 350,000 more such families in 2006 than in 2002. More than 21 million children now live in low-income working families—an increase of 800,000 in four years.

The report documents the sharp decline in living standards for wide layers of the working class, the result of decades of corporate downsizing and wage-cutting presided over by Democratic and well as Republican administrations. It shows that poverty-level jobs are increasingly common and are held by broad sections of the population. Contrary to certain stereotypes promoted by the media, the majority of families living on poverty wages are neither immigrants, minorities or families with a single parent.

The report notes that working poor families “lack the earnings necessary to meet their basic needs—a struggle exacerbated by soaring prices for food, gas, health and education.” About 60 percent of low-income working families are forced to spend more than one-third of their income on housing, and nearly 40 percent lack health insurance for one or both parents.

These figures seem to go up every year, but few notice, unless you are unfortunate enough to be in the multitude of the working poor.

Voter Registration Fraud

The Repubs have ACORN to bitch about….and they do…constantly. Now the Dems have something to counter with…if only they will.

Voting rights groups demanded a criminal investigation this week into whether or not New Mexico’s Bernalillo County Clerk’s Office released confidential voter information to Republican Party operatives in violation of state privacy laws.

According to a statement from the American Civil Liberties Union (ACLU), Wed., Oct. 22, local Republican Party officials released a press packet last week that contained photocopies of dozens of voter registration forms. Evidence on the completed forms showed that they were reviewed by the Bernalillo County Clerk’s office before being handled by the Republican Party.

The ACLU said the evidence indicates that the completed voter registration forms were given to the Republicans by the Bernalillo County Clerk’s Office.

New Mexico state law prohibits the release of voter registration materials to anyone other than the voter. If found guilty, officials at the County Clerk responsible for the transmission of sensitive documents could be charged with a 4th degree felony.

In a statement, ACLU Executive Director Peter Simonson said, “The evidence suggests to us a stunning disregard for the privacy of New Mexico voters and the laws of our state that ensure orderly elections.”

Simonson added that the apparent illegal release of such documents may constitute a form of voter intimidation. “Voters should not have to fear that their identifying information is going to make its way into the hands of people who want to influence their vote or intimidate them into not voting at all,” he said.

Because the Republican Party officials handled the illegally obtained materials and distributed private information to the press, they are implicated in the matter as well. The Republicans distributed the material in an attempt to demonstrate voter fraud on the part of voter registration groups. While they produced no evidence of that, they did appear to jump into another scandal tying them to apparently illegal actions by someone at the County Clerk’s office.
Bernalillo County Clerk Maggie Toulouse Oliver denied providing the Republicans with the documents and suggested to other media outlets that another county clerk with access to the same database could have done so. She did agree, however, that an investigation into the matter is warranted.