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Predatory lenders have caused a record number of home mortgage foreclosures. Credit card firms are extorting millions of dollars in “penalties” from customers who have never made a late payment or gone over their credit limit. Insurance companies are weaseling out of billions of dollars’ worth of claims, using the zaniest excuses imaginable. And you’re paying hidden fees and surcharges every time you rent a car, stay in a hotel, go to the bank, sign up for a new phone service (or cable TV or Internet service), deposit money in your retirement account…

And yet Libertarians and rightwing Republicans keep insisting that there’s no problem here. This is capitalism, Buddy; the free market. Caveat Emptor. That stupid mouthbreathing retard should’ve read the fine print.

Riiight.

What the fuck are we devolving into? A company can hide a booby trap on page 37 of a contract — written in legalese in a size .01 font — and it’s up to the customer to spend several hours poring over the contract with a magnifying glass.

How far does this “logic” go? Is it legal to sell fake Rolexes on the street for $200 apiece? After all, if some dumbfuck is gullible enough to buy one — cool!

Auto repair shops should be allowed to use the cheapest shoddiest parts they can find and then tell you they used the highest quality components money can buy (and charge you accordingly). Hell, why even make them work on your car at all? They can just tell you they did it and then charge you $1,200 for the work they didn’t do. Hey, if you’re suspicious, just look under the hood and check it out for yourself. What, you want some big fluffy drooling Nanny State hovering over you??

And why is it against the law to assault or mug someone? When you’re walking down the street, it’s up to you to be aware of your surroundings and be ready and able to fend off any would-be attacker. If a person is oblivious or preoccupied, and/or too feeble to defend him/herself — hey, easy pickings!

People get thrown in jail when they try anything mentioned in the previous three paragraphs. And when slippery businesspeople mug their customers with deceptive practices and fine print, they belong in jail too. And throw the key away.

Economists attempt to measure the health of the economy in a variety of ways. I’m of the opinion that two news reports (here and here) shed some ominous light on its status and may well signal the need to sound the alarm bells. For many years real estate, and in particular home ownership, has been the single greatest source of wealth accumulation for the average American. As such, it has served as the foundation for much of our confidence to spend money.

Having the safety and security of growing home equity has given consumers confidence to make purchases they might otherwise forego. It has also been the source of the capital needed to make large ticket purchases that wages may not always enable. The buying, selling, and refinancing of homes has pumped countless dollars into our economy and in recent years it has helped to offset the shifting dynamics of growth.

Following the recessionary period at the beginning of this decade, much of the growth we’ve experienced hasn’t translated to better jobs or higher wages. In fact, for a large majority of Americans, the latest period of economic growth has been accompanied by a decline in the standard of living…except for those in the top tier of incomes.

Here’s where the housing bubble comes into play. In this same period of time, we’ve seen an unprecedented increase in home values and therefore some means for consumers to offset the lack of measurable benefits from this latest period of economic expansion. Unfortunately, that offset appears headed towards a screeching stop…and likely a virtual reversal of fortune.

Let’s first look at the foreclosure picture since the bubble has already burst for these individuals.

WASHINGTON - Home foreclosures soared to an all-time high in the final quarter of last year and are likely to keep on rising, underscoring the suffering of distressed homeowners and the growing danger the housing meltdown poses for the economy.

The Mortgage Bankers Association, in a quarterly snapshot of the mortgage market released Thursday, said the proportion of all mortgages nationwide that fell into foreclosure shot up to a record high of 0.83 percent in the October-to-December quarter. That surpassed the previous high of 0.78 percent set in the prior quarter.

More homeowners — at the same time — fell behind on their monthly payments.

The delinquency rate for all mortgages climbed to 5.82 percent in the fourth quarter. That was up from the 5.59 percent in the third quarter and was the highest since 1985. Payments are considered delinquent if they are 30 or more days past due.

The percentage of subprime adjustable-rate mortgages that entered the foreclosure process soared to a record of 5.29 percent in the fourth quarter. That was up from 4.72 percent in the prior quarter, which had marked the previous high. Late payments skyrocketed to a record high of 20.02 percent in the fourth quarter, up from 18.81 percent — the previous high — in the third quarter.

Take note of four key numbers. One, we’re approaching the point at which one percent of all mortgages are in foreclosure. Two, over five percent of ALL mortgages were considered delinquent. Three, over five percent of all subprime adjustable rate mortgages are in foreclosure. Four, over twenty percent of the remaining subprime loans are delinquent.

It doesn’t take a math wizard to realize that we’re on the front end of this crisis and it’s clearly going to get worse before it gets better. Why? Two reasons. First, the interest rates on more loans are going to adjust upward. Second, home values are going to continue to decline which will mean more borrowers will be unable to refinance. So what does this mean? It means there is currently nothing on the horizon that will blunt the increase in foreclosures…or the increase in borrowers who won’t be able to refinance out of unfavorable loans.

Now let’s look another key piece of the problem…the decline in homeowner equity.

NEW YORK - Americans’ percentage of equity in their homes fell below 50 percent for the first time on record since 1945, the Federal Reserve said Thursday.

Homeowners’ portion of equity slipped to downwardly revised 49.6 percent in the second quarter of 2007, the central bank reported in its quarterly U.S. Flow of Funds Accounts, and declined further to 47.9 percent in the fourth quarter — the third straight quarter it was under 50 percent.

That marks the first time homeowners’ debt on their houses exceeds their equity since the Fed started tracking the data in 1945.

The total value of equity also fell for the third straight quarter to $9.65 trillion from a downwardly revised $9.93 trillion in the third quarter.

Home equity, which is equal to the percentage of a home’s market value minus mortgage-related debt, has steadily decreased even as home prices jumped earlier this decade due to a surge in cash-out refinances, home equity loans and lines of credit and an increase in 100 percent or more home financing.

Economists expect this figure to drop even further as declining home prices eat into the value of most Americans’ single largest asset.

Moody’s Economy.com estimates that 8.8 million homeowners, or about 10.3 percent of homes, will have zero or negative equity by the end of the month. Even more disturbing, about 13.8 million households, or 15.9 percent, will be “upside down” if prices fall 20 percent from their peak.

The latest Standard & Poor’s/Case-Shiller index showed U.S. home prices plunging 8.9 percent in the final quarter of 2007 compared with a year ago, the steepest decline in the 20-year history of the index.

I would argue that this data may be even more troubling than the rising foreclosure and delinquency rates because it undoubtedly predicts more declines in consumer confidence and spending and thus growing recessionary pressure.

Take particular note of the connection between the housing bubble and the latest economic expansion. When home values soared at the beginning of this decade, homeowners borrowed more money. They did so because the economic growth didn’t translate into better jobs and higher wages. Hence, more Americans dipped into rising home equity to keep apace with rising costs….and we haven’t even touched on rising credit card debt.

What this tells us is that the latest expansionary period was primarily manufactured through the implementation of artificially low interest rates which enabled homeowners to bolster spending through debt. Lower interest rates meant people could afford more expensive homes. Once this rollover process began, it set in motion rising home prices that were unsustainable. Even worse, it gave homeowners and borrowers a false sense of security. People began to believe their home values would continue to rise and they became less averse to pulling out and spending a higher percentage of their paper equity.

While one can fault these individuals for taking greater risk, one must also consider the incompetence of those who enabled this housing bubble…complete with shoddy monetary policy, suspect lending practices, and inadequate oversight. Not since the Savings & Loan scandal of the late 80’s have we seen such shortsighted and lax practices…complete with the now infamous non-qualifying assumption loans.

Well, just over twenty years later, we’ve done it again. I have two favorite examples of the current debacle. First, the 125% loan…a loan that simply allowed homeowners to borrow 25% more than a home was worth. Second, what the industry initially called “stated income” loans (NINA’s - no income, no asset verifications), which are now being called “liar loans”. Essentially, the borrower was allowed to state an annual income and place a value on assets held without the requirement of any substantiation.

What remains to be seen is how long it will take our government to fully embrace the magnitude of the current crisis. Sadly, the hope that reducing interest rates or rolling out programs like “Project Lifeline” will solve this problem is more of the same. A quick look at the value of the dollar informs us of the consequences that accompany these efforts to avoid the inevitable.

Harsh as this may sound, I find myself in general agreement with the following thoughts of Robert Samuelson from a recent Washington Post column.

Gloom. Doom. Calamity. Home prices are tumbling. We’re bombarded by somber reports. But wait. This is actually good news, because lower home prices are the only real solution to the housing collapse. The sooner prices fall, the better. The longer the adjustment takes, the longer the housing slump (weak sales, low construction, high numbers of unsold homes) will last.

Samuelson isn’t keen on aggressive measures to assist those who are in foreclosure or upside down; arguing that it only postpones the necessary adjustment. While this may sound heartless, the point he’s making is that we must cease our efforts to bolster a weakened and changing economic structure by creating artificial housing prices. The sooner we strip away this facade, the sooner we can begin to address the deficiencies of our underlying economy.

The longer we tinker with the primary means of accumulating wealth (homeownership), the more likely it won’t be available to more and more Americans. In this time of job loss to globalization, we can ill-afford to damage one of the last bastions of the American Dream…especially for an increasingly challenged middle class.

We must demand that our politicians implement the measures necessary to insure a sound and sustainable economy without resorting to politically expedient manipulations meant to mask the manifestations of a world economy. While the world used to be our oyster, I suspect our share of the pearls is destined to decline. Knowing this, I would suggest our leaders start by setting a better example with regards to fiscal responsibility. Lest we be buried by the shifting tides, it’s time for a sea-change.

Cross-posted at Thought Theater

There is an ongoing battle over health care in the United States. Those opposed to universal health care argue that the implementation of such a plan will result in a decline in the quality of care. Time and again, they cite the reported delays in accessing needed procedures in those countries that provide such care as evidence. They also make anecdotal assertions about the growing number of foreigners who seek medical care in the United States…while ignoring the same indications that more Americans are seeking medical care in other countries.

While there may be legitimate concerns about the implementation of a universal health care system, I’ve previously written about the fallacies contained in many of these arguments. I’ve also directed readers to studies that offer a less than stellar assessment of the health care we’re currently receiving.

The recent report from Nevada on the mishandling of syringes and vials, which may have resulted in potentially exposing 40,000 patients to Hepatitis C, is further evidence that our system has its share of deficiencies.

WASHINGTON (AP) — An outbreak of hepatitis C at a Nevada clinic may represent “the tip of an iceberg” of safety problems at clinics around the country, according to the head of the Centers for Disease Control and Prevention.

The city of Las Vegas shut down the Endoscopy Center of Southern Nevada last Friday after state health officials determined that six patients had contracted hepatitis C because of unsafe practices including clinic staff reusing syringes and vials. Nevada health officials are trying to contact about 40,000 patients who received anesthesia by injection at the clinic between March 2004 and Jan. 11 to urge them to get tested for hepatitis C, hepatitis B and HIV.

Senate Majority Leader Harry Reid, D-Nev., met Monday with CDC head Dr. Julie Gerberding, and on a media conference call after their meeting both strongly condemned practices at the clinic.

Health care accreditors “would consider this a patient safety error that falls into the category of a ‘never event,’ meaning this should never happen in contemporary health care organizations,” said Gerberding.

“Our concern is that this could represent the tip of an iceberg and we need to be much more aggressive about alerting clinicians about how improper this practice is,” she said, “but also continuing to invest in our ability to detect these needles in a haystack at the state level so we recognize when there has been a bad practice and patients can be alerted and tested.”

Let me attempt to explain exactly what appears to have happened at these clinics. In performing procedures on patients with Hepatitis C, clinicians may have been reusing the syringes used in sedating these infected individuals on other patients…or they were reusing the same syringe a second time on an individual infected with the disease when drawing a sedating medication from a multi-dose vial…which was then used to draw medication to sedate other patients. The bottom line is that the disease could have contaminated either the syringe or the vial containing the sedating medication.

Look, I’m not a doctor or a scientist…but it isn’t that difficult to understand that if you put something (a needle connected to a syringe containing a fluid) into a contaminated substance (blood in the tissue of an infected individual in this case), there is a risk that the infected substance can travel into any connected portion of that device (think backwash from a straw or the basic concept of osmotic transfer) or into any container that device may subsequently come into contact with.

So what does this tell us about our health care? Well, according to the representative from the CDC, these clinicians were conducting practices that are NEVER EVER acceptable. In doing so, they were violating a very basic guideline; not some complex concept beyond those capable of rudimentary rational thought. Frankly, if one can’t be sedated for a colonoscopy without the risk of contracting Hepatitis C, what hope should we have that a life saving surgical procedure will follow proper protocol?

To be fair, that isn’t an argument that affirms the quality of services one might expect under a universal health care system. However, it is a valid criticism of our existing system as well as a rebuttal to those who sing its praises. Truth be told, health care is only as good as the commitment of those who provide it. The argument that universal health care will make the practice of medicine less lucrative may…and I repeat may…have some merit. At the same time, are we to believe that the hippocratic oath is subject to suspension should the bottom line be diminished?

Given the incidence of malpractice and the other previously referenced negative reports on our health care system, it appears that ever increasing profits are no more a predictor of high quality health care than decreased profits would be of lesser quality care. Further, if those in the field of medicine predicate their performance upon profitability, we’re all one bad bottom line away from a botched procedure.

Unless and until we restore the word “care” to our health system, it won’t actually matter whether it is administered as a result of an open market construct (think 47 million uninsured) or as a function of some degree of universally mandated insurance. The provision of care ought to be a given; not an endless negotiation. It’s time we choose to do the right thing. It’s a matter of life and death.

Cross-posted at Thought Theater

You’ve gotta check out this article. It’s long, but it’s an excellent read: appalling, hilarious, infuriating, absurd…

The author, Leonard Pierce, infiltrated the annual meeting of the Conservative Political Action Committee (CPAC). He got in by posing as a lobbyist for the American Milk Solids Council. We know that two percent of America has gotten rich beyond belief in the past 7 years, and that 19% still think George W. Bush is doing a heckuva job.

Knowing those statistics is one thing, but just imagine being surrounded by thousands of these people. As Pierce describes it, “Here’s a description of Hell: a huge room full of all the people you hate most, and they’re all having a wonderful time.”

There’s a speech by Dick Cheney (of course). During his speech, the crowd starts cheering and yelling “Four More Years!” Cheney gives the usual soundbites about 9/11, telecom immunity and the wonders of torture. But the most telling thing about Cheney’s speech was the observation that: “His defense of torture gets a standing ovation, but his praising of our fighting men in uniform does not. It takes a man to fight, but it takes a train to waterboard.”

Next comes Mitt Romney’s famous speech where he says he entered the race because he loves his country and now he’s leaving (the race, not the country) for the same reason.

And there has to be a speech by Dumbya. Before Boozo the Clown even begins his speech, the crowd starts chanting “Four More Years!”

Bush’s speech itself had the predictable Bushisms: “Dick Cheney is the greatest vice president in the history of the United States.” The Bush Administration “didn’t seek the approval of editorialists…and we darned sure didn’t seek permission from groups like Code Pink and MoveOn before taking action.”

But check out Pierce’s description of Bush:

“In person, he looks a little haggard and tired: no legacy to speak of, no friends overseas (whither Pooty-Poot? a nation turns its starving eyes to you), and another boatload of corpses to go and frown at later today. He won’t last as long as his old man once he’s out of office: With no one to stand in the way of, with no one to infuriate, with no press hanging over his shoulder for him to mutter ‘fuck off’ at, he’ll wither away and disappear, just another burnout boomer with prostate cancer and no hobbies.”

Twenty-five years ago I was sitting in a political science class listening to the professor explain how the extreme right and the extreme left end up in the same place - Totalitarianism. At the time I was taken by surprise. How could the extremists goals of two completely opposite ideas result in the exact same result?

From time to time that same circular diagram that that professor drew on the black board pops into my head. The diagram continues to remind me that moderation may be the best action with the most reasonable results. But, the diagram also has its subtleties. For example, are government interventions always bad? How much government intervention is too much? Can one side of the political aisle claim to be the party of less government? Isn’t it true that extreme conservatives will eventually demand the government to take control - like the Fascists of World War II?

Unless one is a true libertarian, which is a very small portion of the American electorate, Americans actually want our government to take some control. The argument isn’t really about more government and less government as the Reagan Conservatives claim. The argument is about which things the government should have a hand in. Religious conservatives want the government to control the culture. Fiscal conservatives want the government to control the working class. Environmentalists want the government to control those who feel they have a right to rape the heartland. Whoever believes in the law wants laws enforced by the government.

So, if most people want the government to intervene in some way, the question should become “What do we want our government to do?”

When we finally stop arguing over the false dichotomy of whether we want more or less government we need to begin to construct an honest idea of what we want a functional government to do. Then we can begin to move in a direction toward a solution that the majority can agree to.

Liberals and Conservatives already have many positions on many issues, and these positions suggest what the total function of government might be. The majority of Americans will agree that government needs to create laws the majority can agree to except to live by. But, what should the purpose of these laws actually be? Should laws be created to restrict the general population, because the general population can not be trusted. Or, should laws be created to restrict those who have power, because those with power can not be trusted? Or, should laws be created to empower the weak because they are at a disadvantage? Should laws be created to protect the weak? Should laws be created to protect property so that the wealthy will not be able to lose their property, even if they are careless with it? Should the government encourage or discourage risk and investment? In the simplified view, should the government control, encourage, discourage or ignore what we do as citizens in order to protect us?

I think that it is interesting to study the two paths in which extremists on the left and on the right eventually come to the conclusion that totalitarianism is the solution. Totalitarianism is type of government that controls all aspects of our lives.

Extremists on the political right are Fascists. Even though many conservatives of today claim that they want less government, they certainly do not want to do away with laws and law enforcement. If these conservatives truly believed in the idea of more freedom and less government they would be happy to be placed in the middle of some failed state like Somalia. In Somalia people are at the will of he War Lords that maintain control by force without law. In reality laws do exist, because the War Lords create their own personal laws to suite themselves. The power of force - be it military, monetary or religious is placed over those forced to obey. Many conservatives view the world based on an extension of this view. Leaders are strong and powerful and they enforce their will by creating rules enforced by power. Since this is the nature of the world the only problem with it is the way in which the rules and laws are created and enforced. If the laws could be created and enforced more fairly everyone could live in peace. Conservatives can see that the main problem is that many different leaders created many different rules and laws. If there were a way in which one universal system of rules could be created then our problems could be solved. Religious conservatives already understand that the problem is solved, because God has given us the universal guide to law. Not all conservatives agree to this. In fact fiscal conservatives believe that business should be free of law and workers should be made to conform to society’s needs. Fascists take the conservative idea of laws to an extreme where every possible law is created in order to make society run a smooth as possible. Whenever a problem is encountered, then a new law is created to fix the problem. If people don’t comply with the rule or law, then the penalty is increased until society conforms and becomes efficient. The government ends up taking control of every aspect of life.

On the other hand the left begins with the idea that workers should be able to live a reasonable life with very little constraint. Workers should be able to have the jobs that they chose to do and be paid a reasonable amount for the work that they do. Immediately we realize that there is a problem here. How can workers demand to be paid for doing a job that society does not need or want? If every person decided to run his or her own company we end up with all chiefs and no Indians to use a politically incorrect metaphor. One way to fix the problem is to demand that people are allowed to do this work and be paid to do it by law. Extremists on the left quickly find that the utopia must be created and fueled by the government. And, the people quickly find that they are forced to do work that the government needs to be done and they are paid what the government decides to pay. The leaders will continually explain that this totalitarian government is only temporary until people realize that what the government is forcing them to do is what they wanted all the time anyway. However, the future never comes and the government wouldn’t know what to do if it did come anyway. The goal ends up becoming creating rules and laws until society conforms and becomes efficient. Which means that the government ends up taking control of every aspect of our life.

So, in America we praise freedom and liberty as a check on either type of extremist. Freedom of speech allows us to question the extremists before they build up enough momentum to make all of the rules and laws that end up controlling our lives. Under the Republican controlled congress and the Bush administration our liberties and freedom were beginning to be stripped away. This is the first step in the direction of either extremist movement. Fortunately the election of 2006 was able to wrest away the congress from the extremists. Similarly, if the left were to begin to make laws restricting our freedoms and liberties another election would give some check to the right. And, once again we would see that the checks and balances of American democracy really does work.

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Don’t forget what Stephen Colbert said, “Reality has a well-known liberal bias.”

Cross Posted @ Bring It On, tblog, Blogger and BlogSpirit

Reflection

A report on the rising number of incarcerated Americans provides a disturbing look at the unspoken impact of economic inequality and the high cost we pay for perpetuating it. At the same time, during each election cycle, politicians from both parties accuse each other of practicing suspect fiscal discipline.

For this discussion, I want to look at the costs of incarceration in relation to providing universal health care as well as the Bush tax cuts. Time and again, the GOP points out the exorbitant costs that might be associated with providing universal health care. From what I’ve read, the plans being pushed by Senators Clinton and Obama are reported to cost 10 to 15 billion dollars annually. That’s a big expense…but before one concludes we can’t afford it, one must consider the burgeoning costs of incarceration and the distribution and impact of the Bush tax cuts.

From The Seattle Post-Intelligencer:

NEW YORK — For the first time in U.S. history, more than one of every 100 adults is in jail or prison, according to a new report documenting America’s rank as the world’s No. 1 incarcerator. It urges states to curtail corrections spending by placing fewer low-risk offenders behind bars.

Using state-by-state data, the report says 2,319,258 Americans were in jail or prison at the start of 2008 - one out of every 99.1 adults. Whether per capita or in raw numbers, it’s more than any other nation.

The report, released Thursday by the Pew Center on the States, said the 50 states spent more than $49 billion on corrections last year, up from less than $11 billion 20 years earlier. The rate of increase for prison costs was six times greater than for higher education spending, the report said.

So in the course of 20 years, we have increased our annual corrections spending by a whopping $38 billion dollars. That is roughly three times the projected annual cost to provide universal health care…health care that would help elevate the very people who are disproportionately represented in the prison population. Factor in the following data on the Bush tax cuts and one will begin to see the larger picture.

From MSNBC.com:

WASHINGTON - Since 2001, President Bush’s tax cuts have shifted federal tax payments from the richest Americans to a wide swath of middle-class families, the Congressional Budget Office has found, a conclusion likely to roil the presidential election campaign.

The conclusions are stark. The effective federal tax rate of the top 1 percent of taxpayers has fallen from 33.4 percent to 26.7 percent, a 20 percent drop. In contrast, the middle 20 percent of taxpayers — whose incomes averaged $51,500 in 2001 — saw their tax rates drop 9.3 percent. The poorest taxpayers saw their taxes fall 16 percent.

Unfortunately, these percentages are deceptive. Let’s look at a practical explanation of what these tax cuts meant to the working poor.

From BusinessWeek.com:

Imagine you are a waitress, married, with two children and a family income of $26,000 per year. Should you be enthusiastic about the tax cuts proposed by President Bush? He certainly wants you to think so. He uses an example of a family like yours to illustrate the benefits of his plan for working Americans. He boasts that struggling low-income families will enjoy the largest percentage reduction in their taxes. The income taxes paid by a family like yours will fall by 100% or more in some cases. This is true–but highly misleading.

President Bush fails to mention that your family pays only about $20 a year in income taxes, so even a 100% reduction does not amount to much. Like three-quarters of working Americans, you pay much more in payroll taxes–about $3,000 a year–than in income taxes. Yet not a penny of the $1.6 trillion package of Bush tax cuts (in reality, closer to $2 trillion over 10 years) is used to reduce payroll taxes. Moreover, should your income from waitressing fall below $26,000 as the economy slows, your family could be among the 75% of families in the lowest 20% of the income distribution that stand to get absolutely zero from the Bush plan.

The President claims that the “typical American family of four” will be able to keep $1,600 more of their money each year under his plan. Since you won’t be getting anything like that, you might be tempted to conclude that your family must be an exception. Not really. The reality is that the President’s claim is disingenuous. Eighty-nine percent of all tax filers, including 95% of those in the bottom 80% of the income distribution, will receive far less than $1,600.

In other words, when a 100% tax cut is the equivalent of $20.00, a family of four might be able to translate that twenty dollars into a meal at McDonalds…one time in 365 days. On the other hand, if one is lucky enough to be in the top one percent (those with $915,000 in pretax income…and first class health care) of earners and receive a 20% tax reduction, I suspect the savings would buy more than one fast food dinner over the course of a year. The skewed advantages…and disadvantages…suddenly become obvious.

If that isn’t bad enough, let’s return to the costs of incarceration and look at future cost projections.

From The New York Times:

By 2011, the report said, states are on track to spend an additional $25 billion.

The cost of medical care is growing by 10 percent annually, the report said, and will accelerate as the prison population ages.

In less than four years, we will spend another $25 billion annually (more than enough to pay for universal health care) to incarcerate more and more Americans…the bulk of which come from the economically underprivileged.

More From The New York Times:

Incarceration rates are even higher for some groups. One in 36 Hispanic adults is behind bars, based on Justice Department figures for 2006. One in 15 black adults is, too, as is one in nine black men between the ages of 20 and 34.

The report, from the Pew Center on the States, also found that only one in 355 white women between the ages of 35 and 39 are behind bars but that one in 100 black women are.

Let me be clear…crime is wrong…and it should be punished. However, we cannot ignore the factors that facilitate crime. Failing to provide opportunities to those most lacking in resources is also wrong…and it often leads to a lack of education and therefore a susceptibility to participating in crimes that are driven by poverty.

We have likely exceeded the point at which it will cost us more to punish and incarcerate those who commit these crimes of poverty than it would have cost us to insure their education, to raise the minimum wage above the poverty level, and to grant them the dignity and peace of mind that comes with knowing one’s family members can receive health care when it is warranted; not just when it is necessary to prevent death.

Instead, under the guidance of the GOP, we have elected to ignore the fact that 47 million Americans lack health care and to focus upon further enriching the wealthiest…all the while being forced to endure asinine arguments that doing so will create jobs and thus facilitate a rising tide to float the boats of all Americans. It simply isn’t true.

At a savings of $20 a year, millions of Americans can’t even buy a seat in the boat…let alone stay afloat by treading water in the midst of the steady deluge of ever more ominous waves. If the number and availability of life preservers continues to dwindle, we are fast approaching the point at which our society will collapse under the weight of the inequity we chose to ignore.

If that happens, it will be as my grandfather argued many years ago, “They can eat you, but they can’t shit you”. The cannibalism has begun. What follows will not be pleasant.

Cross-posted at Thought Theater

Denying the claims of economists nationwide, President Bush today said that HE doesn’t think the nation is headed towards recession.

“I’m concerned about the economy. I don’t think we’re headed to recession. But no question, we’re in a slowdown.”

At the White House news conference, Bush also claimed that the dollar was still strong:

“I believe that our economy has got the fundamentals in place for us to … grow and continue growing, more robustly hopefully than we’re growing now. So we’re still for a strong dollar.”

And he’s quite proud of the faux-stimulus plan passed by Congress and signed by him-you know the one that borrows another $150 billion from foreigners so he can give taxpayers a small shot in the financial arm at the expense of future generations descended from those same taxpayers:

“We acted robustly…we’ll see the effects of this pro-growth package.”

And he rejected any additional stimulus plans for now:

“Why don’t we let stimulus package 1, which seemed like a good idea at the time, have a chance to kick in?”

Which seemed like a good idea at the time? Is he implying that just maybe it wasn’t really such a splendid economic plan, but rather a meaningless pander and giveaway that ultimately does nothing but bury this country further?

When asked about growing consumer concern about the economy, and in particular about the possibility of gasoline costs reaching the $4 mark by summer, Bush had this to say:

“That’s interesting. I hadn’t heard that. … I know it’s high now.”

All of these are telling signs of an executive completely out of touch with reality. Of course, we know that Bush has been out of touch with reality for most of his life, so none of these pronouncements should be a surprise, considering the source. But it almost stretches incredulity to accept that our nation’s leader is this far out of touch with reality, the reality that most economists recognize and that most Americans are enduring as best they can.

Earlier this week, my local paper pulled out the super-font to declare STAGFLATION- that lovely economic state marked by stagnant economic growth, rampant inflation and rising unemployment. And many economists agree that the outlook is not at all comforting.

“We have stagflation,” said Peter Schiff, head of Euro Pacific Capital in Newport Beach. “No matter what the government numbers say, we’re in a recession already, especially if you measure our growth against foreign currencies or gold. And even by the government’s figures, we clearly have very high inflation – and the government data really don’t capture the extent of how prices are rising.”

Right- food and energy costs aren’t included in federal economic numbers…as if the costs of these items don’t really affect average folks. Silly of us to be concerned if we have a tough time filling the gas tank so we can get to work to earn enough money to decide whether to fill the tank again or feed the family some food that might actually be good for them.

Let’s see here…among the signs of recession, the dollar is weak and getting weaker (hell- the Canadian dollar is worth more the the US dollar), gold is surging (which occurs when the dollar is so weak), the Fed keeps cutting interest rates, home foreclosures are at decade highs, unemployment is rising, inflation is rising….yep, I can see why Bush thinks we’re going along fine.

The president isn’t too worried:

“We’ll make it through this period just like we made it through other periods of uncertainty during my presidency.”

Oh right… rough periods like Katrina and Iraq. ‘Nuff said Mr. President.

WHEW! And to think I was worried there for a minute. I’d like to get a pair of those rose colored glasses Bush has. Maybe he could offer that as a stimulus plan.

(cross posted at Common Sense)

According to this Business Week article, 2007 might be remembered as the year angry customers started fighting back. We all heard about the 76-year-old woman who came storming into her local ComCast office with a hammer and started swinging. After damaging a keyboard and a phone, she yelled out “have I got your attention now?”

And last Spring a pissed-off Apple customer made a YouTube video of himself smashing his Macbook with a sledgehammer after Apple refused to honor a service warranty. So far over 340,000 people have seen the video. (And Apple has agreed to replace his defective computer.)

The author, Jena McGregor, says: “Consumers already pushed to the brink by evaporating home equity, job insecurity, and rising prices are more apt to snap when hit with long hold times and impenetrable phone trees.”

She uses the term Consumer Vigilante. Even if you don’t settle your grudge with a sledgehammer, more and more people are discovering that there are other options besides sitting there waiting on hold all afternoon because both operators are busy.

The e-mail carpet bomb is becoming more popular.

Last October a National Public Radio host created a website called ComCastMustDie.com. The article has a few other examples of pissed off customers who settled things their own way.

And occasionally the courts come through. A few days ago, one of those slippery HMOs got hit with a crushing left hook to the bank account. In 2004, Health Net canceled a woman’s medical insurance while she was undergoing treatment for breast cancer. She was left with $129,000 in unpaid medical bills. A judge has ordered Health Net to repay the $129,000 plus $750,000 for emotional distress and $8.4 million in punitive damages.

As conservatives are always saying, severe punishments are the only way to deter criminals.

Health Net is also being sued by the City of Los Angeles for illegally canceling the health insurance policies of 1,600 other patients. The company had an incentive program: administrators had to meet a certain cancellation quota, and if they exceeded their quota they’d get a bonus. (See, this isn’t just something Michael Moore dreamed up.)

Maybe these are just isolated incidents, or maybe there’s a positive trend. No matter who or what gets elected next November, maybe this 21st Century Gilded Age is starting to wane.

Three cheers for the IRS! As hated as they are, sometimes they end up doing the jobs of our government “regulators,” using the term loosely.

The IRS has ruled that FedEx is no longer entitled to receive hundreds of millions of dollars worth of welfare payments. These handouts were being given by FedEx workers to their bosses.

Here’s how the scam worked: 13,000 FedEx employees were reclassified as “independent contractors.” The IRS ruled that this classification was incorrect, and that FedEx illegally “saved” $319 million in taxes in 2002. The IRS is still auditing FedEx for 2004 through 2006.

The Teamsters Union — who’s been pushing this case — thinks FedEx could ultimately owe the IRS a billion dollars.

Companies save a fortune when they redefine their employees as “independent contractors.” A company doesn’t have to pay workers’ compensation, unemployment or disability taxes, Social Security or Medicare taxes to an independent contractor. Independent contractors also aren’t subject to minimum wage laws and they have no government guarantee of a safe work environment.

It must have seemed like the best of both worlds for FedEx bosses: they could keep their workers straitjacketed with a million company regulations, and then wiggle out of paying their fair share of taxes by calling them “independent contractors.” Fun’s over, Assholes.

If you want to decide whether these FedEx workers are employees or independent contractors, take the “DUUHH” test: they use FedEx equipment, they wear FedEx uniforms and they work under strict FedEx rules. Independent contractors???

Just how many revised economic forecasts does it take to finally conclude that the U.S. is in a recession? Former Fed Chairman Alan Greenspan likes to up his odds we’re heading into a recession by approximately 20 percentage points every quarter. Current Fed Chairman Ben Bernanke seems to prefer a different approach. His modus operandi is to lower GDP a few tenths of a percent with each revised outlook.

As an outside observer, this measured slide towards using the “R” word feels like being in my car at a red stoplight with my favorite backseat driver seated beside me. As we wait for the lights to change (because we know they will), my trusted traffic manager sits there predicting the seconds until the opposing green light will turn yellow…never getting it quite right…but jubilant each time he announces…after the fact…that “The light just turned yellow”. This process continues until our red light turns green and we can proceed to the next intersection…to start all over again.

While I realize my analogy isn’t an actual equivalent, the frustrations are much the same. Yes, predicting the twists and turns of the economy isn’t an exact science…but I do find our willingness to grant these prognosticators a free pass each time they err to be a rather absurd practice. The fact that the nation holds its breath each time a new report is scheduled for release merely supports my contention.

WASHINGTON (AP) — The Federal Reserve on Wednesday lowered its projection for economic growth this year, citing damage from the double blows of a housing slump and credit crunch. It said it also expects higher unemployment and inflation.

Under its new economic forecast, the Fed said that it now believes the gross domestic product will grow between 1.3 percent and 2 percent this year. That’s lower than a previous Fed forecast for growth, which at that time was estimated to be between 1.8 percent and 2.5 percent.

With economic growth slowing, the Fed projected that the national jobless rate will rise to between 5.2 percent to 5.3 percent this year. That is higher than the central bank’s old forecast for the rate to climb to as high as 4.9 percent. Last year, the unemployment rate averaged 4.6 percent.

And, with energy prices marching upward, the Fed also raised its projection for inflation. The Fed now expects inflation to be between 2.1 percent and 2.4 percent this year. That’s higher than its old forecast for inflation, which was estimated to come in at around 1.8 percent to 2.1 percent.

The Fed said its revised forecasts reflected a number of factors including “a further intensification of the housing market correction, tighter credit conditions …. ongoing turmoil in financial markets and higher oil prices.”

In truth, I suspect that the average American has just as good a sense of where the economy is headed as those who get paid to inform us. If the last number in our checkbook is negative, we conclude we have a problem. Why wouldn’t the same math hold true for our national economy?

No, we allow our political leaders to sell us on the notion that a tax rebate of $300.00 to $1,200.00 is all that matters and all that is needed to jump start the economy…even as they continue to predict further economic contraction. Excuse me, but isn’t that on par with each of us taking a cash advance on an already debt heavy credit card and thinking we’re suddenly in the black?

Look, I understand the notion of spending an economy out of a downturn. However, the rest of that equation posits that the increased spending will result in new jobs, greater investment and productivity, and increasing revenues for the individual, the corporation, and the government.

Unfortunately, this equation may no longer be valid…especially since the jobs are often created in other nations, the investments are frequently targeted for countries with cheap labor such that productivity is less relevant, and the only increased revenues find their way into the pockets of formerly impoverished third world individuals and the corporations and their CEO’s that benefit from the enhanced bottom line that ensues.

So what does the average American get? A stimulus package that provides a single check that won’t overcome the unfavorable wage-inflation ratios, the higher costs of fuel, the expanding credit card debt, the skyrocketing health care costs, and the ever shrinking job opportunities.

At the same time, some of our political leaders clamor for making the tax cuts for the wealthiest Americans permanent and lowering the corporate tax rate from 35 to 25 percent. I don’t know about anyone else, but these refund checks remind me of the dynamics underlying “the world’s oldest profession”…the one where one party gets poked for a few bucks by the fat cat who realizes that money can buy him anything he wants.

In the end, getting the powers that be to speak the “R” word is an exercise in relabeling. After all, once the deed has been done and the hush money has been paid, does it really matter what we call an old fashioned screwing? I think not.

Cross-posted at Thought Theater