What Congress Should Learn from OWS

This post written by me was orginally posted on Policymic and No Labels

 

Occupy Wall Street has taken off. The movement is quickly spreading across the world, with new Occupy movement surfacing seemingly daily. The movement is not without its critics, who point to the vast number of messages coming out of the protests as a sign the movement does not have a singular voice.

While there may be many messages out there from the participants, it is not hard to find some central themes from the movement. Not just Wall Street needs to be listening. Congress can and should learn a lot from the Occupy movement, using the protests as a motivation to end our partisan gridlock and do what is best for the country.

Neither Congress nor Wall Street is innocent when it comes to causes of the current crisis, and because of this, neither has been good at finding solutions. The OWS movement has come clear asks, listed on their website as a series of complaints against the industry.

Here are a couple that Congress should pay particular attention to: stop illegal foreclosures; no more bank bailouts; and create jobs.

All of these have direct links to actions that Congress can take. People are angry that despite the robo-signing scandal, big banks are still trying to foreclose on homes with fraudulent paperwork and/or without being able to produce the note. Congress can pass legislation making this illegal, which would force banks to clean up their paperwork. The robo-signing scandal has banks like Bank of America facing lawsuits that could cripple them.

This leads to another ask of the movement, no more bank bailouts. Congress should listen, stop fighting the provisions in the Dodd/Frank Act that stop too big to fail, and provide a path to winding a bank down instead of bailing banks out.

The biggest grievance of the movement and every other American is creating jobs. Neither side can agree on how to create jobs, but everyone in Congress should take the growing anger as a sign to put aside partisanship and get some legislation passed. Getting people back to work is the single most important demand. Jobs can help homeowners pay their mortgage and avoid foreclosure, help recent grads pay their student loans, can get people spending money to boost the economy, and can create a bigger tax base to generate more tax revenue.

To me, the message is pretty clear: People are clearly angry by the direction of this country. Even though the brunt of the anger is being directed at Wall Street, Congress is not shielded. The messages should not only be heard by the big banks on Wall Street, but also through the halls of Congress. There are specific asks that Congress can act on, and they should listen carefully to the occupiers. Both Congress and OWS are made up of varying people with different mindsets, yet OWS protesters have managed to find a way to work together.

Here is to hoping that Congress is not only listening, but learning from OWS on how to work together, so they can end the gridlock and do what is best for the country.

Why Progressives Should Support School Choice

This was originally posted in www.policymic.com and was written by Andrew Hanson, who also writes his own blog I suggest you check out.  It was part of a debate and you can read the other side here.  I think he raises some valid points about choice in the school system with vouchers.

The American debate over school choice dates back at least as far back as the 1970s, a decade after Milton Friedman published Capitalism and Freedom, in which he argued for the establishment of school vouchers that families could use to send their children to a public or private school of their choosing. Friedman’s argument gained influence in libertarian circles because of its resemblance to market systems that included competition. Social conservatives liked the idea of using tax revenues toward tuition at parochial schools.

Progressives have mostly rejected the school choice movement because of its potential to undermine public schools as well as exacerbate inequalities and segregation. But progressives have failed to appreciate just how bad the current system has been at achieving the goals they so vehemently defend. Instead of rejecting school choice altogether, they should embrace the beneficial aspects of a choice system alongside a specific set of revisions that address their concerns.

In the U.S., most funding for public schools comes from local property taxes. This system is both uniquely American and uniquely terrible. It has led to greater inequality and segregation and less social mobility than in other industrialized countries. Poor communities have less property tax revenue than affluent communities and, as a result, less funding for schools. Affluent communities can invest in buildings, facilities, and advanced technology that poor communities cannot afford. More importantly, affluent school districts are able to attract better teaching talent by offering higher salaries and less stressful working conditions. As a result, the U.S. education system exacerbates the inequalities that disadvantaged children enter primary school with. Middle- and upper-class families have a way to get their children out of bad schools: They can pick up and move to the suburbs. Since poorer families are less mobile and often cannot afford to move to suburbia, their choices are limited.

Progressives should be up in arms over these injustices. Most have a “system justification” bias — an inclination to defend the status quo as fair and just. They believe in public schools and they feel the need to defend them against conservative attacks. Consider the conservative critique that public schools are “inefficient.” Progressives typically, and erroneously, respond that efficiency is not important. If a system is inefficient, that means there is a free lunch on the table waiting to be eaten.

However, some progressive criticisms of a “free-market” voucher system are strong. Affluent parents could supplement their voucher with extra income to send their children to better schools, worsening inequalities. The system could become more segregated by race, class, and religion. Teaching creationism in the classroom could undermine scientific education. In general, students’ exposure to varying ideas and cultures could narrow.

Progressives can maintain these concerns without rejecting school choice altogether. Vouchers could be means-tested, or affluent parents could be restricted from using their own incomes alongside vouchers to pay for tuition. A school that accepts vouchers could be required to accept regulations on its curriculum, such as the teaching of creationism in biology. Most importantly, the government could offer additional financial incentives to schools that achieve a desired level of integration.

I share progressives’ concerns about the risks of a free market in education. But a free market is not a necessary feature of a choice system. We can embrace choice while maintaining our commitment to equal opportunity and integration, secularism, and social justice.

Policies to Help Address Income Inequality

This is an article I wrote that originally appeared on PolicyMic. It was part of a debate about Income Inequality in this country.  You can read the other side of the debate here.

With the recent news that the poverty numbers in this country have risen, combined with earlier reports of a widening wealth gap, it is clear that we have an issue with income inequality in this country.

Some will argue that the income inequality is overstated. Others will say that policies designed to minimize the inequality do the exact opposite and negatively impact the poor. However, the real problem is a lack of both financial literacy and the right policies. While income inequality is a product of our system and will always be here, if we couple financial literacy with good policy, then the impact of this inequality can be minimized and have a positive impact on the poor.

The widening wealth gap and the poverty numbers are enough evidence to show that income inequality in this county is not overstated. I want to focus on the policies that are designed to minimize their impact. I will admit that every policy may not be a good thing, while others are debatable. For example, I don’t think the government should be in the business of supplying cell phones, and policies like the minimum wage are debatable.

The Earned Income Tax Credit (EITC) is a refundable tax credit for low-income families that was enacted in 1975. In a nutshell, this is a program that is designed to incentivize work. It accomplishes this by decreasing the tax burden on wages and also serving as an income supplement through the refundable portion.

Recent numbers show that this program pumped nearly $59 billion back into the economy through low-income families. Even with the poverty numbers rising, the numbers would beeven worse without the EITC. This program is further enhanced by 23 states that have varying state versions of the credit, meant to increase the positive impact on low-income families.

While this program has been proven to help people stay above the poverty line, it also shows a glaring weakness in the system. Simply providing an incentive to work through refundable tax credits is not enough. A glaring problem in this country is the lack of financial literacy. The lack of literacy can also be felt in our housing crisis. Families looking to purchase homes compensated for their lack of financial wherewithal by trusting brokers to help them wade the waters. These brokers were focused on their bottom line and not on educating the borrower. This led to loan steering into sub-prime mortgages, because once the loan closed, the broker was off the hook.

An increased investment in financial literacy would have not only helped in avoiding the sub prime crisis, it would also help make successful programs like the EITC even better. The credit maxes out at $5,666, and for a low-wage worker, that is more than they bring home in several months. With little emphasis on financial literacy, it is unrealistic for us to expect every dollar to be spent wisely. However, with a greater emphasis on financial education, families could learn how to better utilize these dollars to minimize the impact of their lack of income.

In North Carolina, the state version of the EITC came under attack during the budget debates. However, even Republican house members had a hard time advocating for the elimination of the refundable portion of the credit, because they had to admit it was an incentive to work. Even those that think eliminating the wage floor and paying lower wages to increase employment would benefit from a program like this as an additional incentive for people to accept these lower wage jobs. I am still not advocating for eliminating the minimum wage but instead want to show the versatility of good policy designed to help the poor.

One thing that all sides of this debate can agree on is that there is income inequality in this country. Even if one side will not admit it, the wealth and poverty numbers support the fact that this inequality is real and not overstated. The fact is that income inequality will always be here and is a product of the capitalistic nature of our society. Even with some questionable programs out there, policies are needed to help limit the impact of the earning disparities that exist.

The EITC is an example of good policy that helps disprove the theory that policies designed to minimize the impact of wealth disparity hurt the poor. When we incorporate financial literacy with programs like the EITC, we won’t eliminate income inequality, but we can help to minimize the impact on low-income workers.

GOP “Let Him Die” Flare-Up Demonstrates Need For Reality Check

This article was originally posted on PolicyMic and was written by Mark Kogan. I felt that his piece on the need for a reality check was a good follow-up to my post about hypocrisy.

Over the course of the last two weeks the Republican nominees for president have had a chance to strut their stuff in two national debates. Just as prominent as the comments of candidates attending the debate, the behavior and reaction of debate audiences has been making headlines nation-wide.

During the MSNBC/Politico debate last week, the audience cheered when debate hosts noted that Rick Perry had overseen a record 234 executions in his term as governor of Texas.

Perhaps more shocking was the audience reaction to a question concerning health care insurance on Monday’s CNN Tea Party debate. In a hypothetical question, debate moderator Wolf Blitzer asked Rep. Ron Paul (R- Texas) whether a 30-year old man who chose not to purchase health insurance should be allowed to die if he cannot secure treatment for a serious accident. Before Paul could answer the question, shouts of “Yes,” cheers, and applause erupted from the audience in response to Blitzer’s morbid outcome.

This reaction was yet another unsettling snapshot of the Tea Party electorate’s worldview. What’s worse, Blitzer’s question was overly friendly to libertarian talking points, ignoring the realities that many in the audience seemed all too quick to forget.

Firstly, Blitzer’s hypothetical insurance buyer was a 30-year old man who could afford insurance but chose not to. This is miles removed from the reality that millions of uninsured people are not uninsured by choice. A 2009 study by the Employment Policies Institute estimated the number of uninsured individuals unable to afford insurance at 22 million Americans. That’s 22 million citizens who don’t have the choice of Blitzer’s hypothetical insurance buyer. Are they left to die in the streets as well?

Second, Blitzer’s uninsured man came to the debate conveniently alone. Being that the average age of marriage in the United States is comfortably below 30 for both men and women, it is safe to assume that reality won’t necessarily reflect Blitzer’s hypothetical. Moreover, with the average number of children hovering around two per family, the audience’s reaction to Blitzer’s question becomes significantly more macabre.

What if we expanded the scenario to a more realistic hypothetical? Imagine that the 30-year old man had invested intelligently and responsibly, putting a down payment on a house he could afford in a reasonable neighborhood for his wife and children. Unfortunately, with the housing market crash, imagine that his mortgage is freshly underwater through absolutely no fault of his own. Now let’s imagine that the wife stays home to take care of the young children (as nearly 25% of married women with children do). If they bear any resemblance to the majority of uninsured families in America (even those earning 400% over poverty level), their total financial assets will be below$4,100. For reference, hospital bills under $10,000 accounted for less than 10% of total care billed to the uninsured.

Finally, let us take another look at Blitzer’s hypothetical. What if this 30-year old married father of two failed to purchase insurance (either through an inability to afford it or through a conscious decision not to)? What would happen if he were left to die in the street? What would happen to his wife? His children?

It is inescapably ironic that an ideological framework that vehemently protests the teachings of Darwin seems to hold Social Darwinism in such high esteem.

Paul’s suggestion of “turning to charity” is the popular talking point in response, but one that suffers from a lack of empirical support. It is worth noting Paul’s home state of Texas suffers from thehighest percentage of uninsured residents in the country.

Total charitable giving in 2010 was just under $300 billion, which included all forms of charitable giving. Of those $300 billion, less than 8% (some $23 billion) went to “health-related organizations.” By comparison, the estimated cost of uninsured health care provided annually is up to $73 billion.

Would usage rates change if individuals were forced to be choosier about seeking health care? Sure. Would individuals donate more money to charity if they paid less in taxes? Maybe. Will the relative increase in charity be enough to cover situations like Blitzer’s hypothetical man? Unlikely.

The danger in playing with ideological hypotheticals is that the platitudes used to answer them often perpetuate the misinformation that causes so many of the problems in our modern political discourse. How else does one square the rage over non-existent government “death panels” with the hand of the market dictating death on those less fortunate? Is the mythical libertarian cure-all of “personal choice” really the answer? What about those who have no choice? What about their children?

While some candidates were quick to distance themselves from the audience’s reaction after the debate, it was telling that no candidate on stage raised their voice to disavow the audience’s reaction.

Now look, I understand that it is primary season and that candidates are going to try harder to appeal to the party fringe in order to secure the candidacy. But, at the end of the day, the chosen candidate will have to explain his or her positions to the general electorate and those explanations will have to be based in fact and reality, not ideology.

Would a Lower or No Minimum Wage Help the Poor?

Over the labor day weekend, I was involved in a spirited debate about whether or not it was good for the poor to lower or eliminate the minimum wage.  It all started after reading an article on PolicyMic called: Teenage Labor Isn’t Worth the Minimum Wage.  The premise of the article is about teenage labor being worth less than the MW and therefore MW policy is bad.

The real fun started in the comment section.  I would encourage everyone to read the article and the comments.  The comments ranged from agreement to attacking unions to disagreement.  Most of the debate was less about the article and more about whether a lower or elimination of the MW was good for the poor.  The arguments for this focused on the MW causing increased unemployment for poor and unskilled workers, because if their skill level was not worth the MW then you won’t get a job. Therefore this bad policy is bad for poor people.  Instead companies should be able to set the market and not have an imposed wage floor.  By paying a lower wage more people can be employed, thus more people are helped.

My argument focused on with no wage floor what separates us from other countries with no floor and families living on pennies a day.  I understand the issue of lower wages can increase employment, but at what cost?  Minimum wage is already not enough to support a family, how can a lower wage be a true benefit.  What good is having everyone employed, but only making $2/hr if they still can’t afford housing, food, clothes, and transportation?  Increasing poverty to increase employment is not a positive gain in my book.  The cost of food and clothes won’t go down, neither will transportation.  The cost of housing could go down, but with lower housing costs comes lower housing standards.

I am interested in what other people think about this.  I know what my friends on PolicyMic think.  While I did not agree with everyone, I respect their thoughts on the issue.  I also think they make some valid points about employment, but I can’t agree with increasing employment while increasing poverty.

Let me know what you think on the issue.

The Climate is Ripe for Riots

This is a post written by me that was originally posted on www.policymic.com.

In early August, right after the debt ceiling debacle, the big news story was the riots in London.  Peaceful protests of a questionable shooting of a father of four quickly turned into a violent affair. While Tottenham is a diverse section of the city, there is a history of racial tension and police distrust, and this shooting pushed those emotions over the edge.

Having a black president in the U.S. shows some progress, but racial tension and distrust between minorities and whites still exists in America. The addition of the worsening economic outlook only adds to this tension, making it more a matter of when, not if, something similar to the London riots can happen here.

We don’t need to go through a history lesson of the racial history in this country. We have our own examples of riots (Rodney King) and questionable police shootings (Sean Bell) that have only fed into the tension and distrust. People thought with the election of black president that race relations would improve. Instead, we have seen a rise in the ranks of white supremacy groups, and both the general public and political leaders believe that race relations have gotten worse. The idea that the 2008 election has pushed us into a post-racial society is simply a false attempt at hiding the real issues.

The economic outlook of minorities does not help the situation. While we have always had a wealth gap in this country, a recent study showed that it has gotten worse during this recession. This has only continued the belief in poor minority communities that the system is against them, but also feeds into the frustration of middle class minorities impacted by the foreclosure crisis. A bad economic outlook is enough to push anyone over the edge and the unemployment numbers for minorities only makes it worse.

When you combine both the direction of race relations and the economic outlook for minorities in this country, things do not look good. Despite the presence of a black president, the atmosphere is ripe for a London-style race riot. The tension is simmering below the surface and just like in London only waiting to boil over.

What We Just Avoided With the Debt Deal

This article was written by me, but originally featured on www.policymic.com.

Our leaders in Washington finally came together and did what was right for the country. Even though there will still be some political posturing about who won the debate, the fact is, they finally listened to all the reports of what would happen if a deal were not made. MyPolicyMic colleague, Jordan Wolf, has alreadylaid out what the deal means going forward. Even with our credit rating still at risk, let’s look at what we are avoiding, and whether or not the darkest days truly would have been ahead.

The cost on consumers would have been far reaching. We were warned about what would happenwith our credit rating with no deal, but even the news media around the world still recognize this as a possibility. The impact on world markets could still be felt, making interest rates on mortgages, car loans, and credit cards still rise and impact consumers’ pockets. Access to credit, which was slowly starting to open up, could once again tighten. The housing market could crash again as people qualify for less homes with rates going up, and sellers sit on homes and drop the prices even more. The markets could have crashed, making people’s investment and retirement accounts bottom out. This would have been just the beginning, but some of these could still be felt.

We already know we don’t raise enough revenue to cover our expenses, which is why we are in this position in the first place. The question was about to become, how do we use the money we do have to pay bills that are due? And let’s be clear, this was not just about paying bills, but also about having a functioning government. The Treasury Department could not pick and choose what bills they would pay. They have said they would pay them as they come with what is available. This means, if your paycheck or benefit check were further down the list, you wouldn’t get paid on time or even at all. This was an even worse proposition for the poor and minorities, as welfare and housing assistance were certainly going to take some hits.

The big issue we avoided was the grey area that would have occurred when people’s paychecks didn’t come. Would guards at federal prisons have shown up for work, would our mail have been delivered, would our military readiness have been impacted, and would judges and federal prosecutors have been available? If not, how would this have impacted security and the ability of our nation to function?

The good thing is that we don’t have to answer any of these questions, unless of course we find ourselves in this same position in 2012. Congress finally acted in the best overall interest of the country and made a deal.  Even if you think it is a flawed deal, it allows our country to move forward and deal with our issues like job creation, debt reduction, and tax reform without the threat of default looming over our heads. We avoided what would have been a dark period of uncertainty and that should be a good thing for everyone.