No Jobs, No Leadership: Obama's Big Fail

You can parse the numbers however you like, but the latest snapshot of the labor market released by the government on Friday tells a dismal story that is already familiar beyond the realm of professional economists and policymakers: The American economy is in grave trouble.

We have no engine for growth, no good reason for businesses to believe that actual human beings will soon have more money to spend, which means employers are inclined to hunker down and keep their costs low by limiting their writing of paychecks. In short, a feedback loop of declining fortunes.

The worst part is what most Americans know in their bones, not from government reports and the abstract musings of economists, but from the everyday fears that accompany glancing at their checkbooks and their latest credit card bills: There is no relief in sight. No one in a position to influence this depressing picture is expending real energy to improve it, and least of all inside the White House, where leadership is imperative.

It would be disingenuous to pin the blame for the chronically lean job market on the Obama administration. The blame goes back over more than a quarter-century: to Ronald Reagan, who turned tax-cut pandering into high art, thus making it politically impossible for his successors to tax the wealthy, thereby accelerating the economic inequality that has left so many Americans unable to spend; to Bill Clinton, who helped turn Wall Street into a wild-west casino, laying the ground for the worst financial disaster since the 1930s; to George W. Bush, who continued both of these projects while wasting our treasure on a pair of ill-conceived wars.

But we have every right to demand that the president of the moment lay out a serious and ambitious plan to dig ourselves out of this hole. On that score, Barack Obama -- who came into office with such grand plans and such a capacity to instill hope -- has proved a disappointing failure.

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How Failed Obama Foreclosure Relief Plan Contributes To Jobs Crisis

WASHINGTON -- The Obama administration's inability to stem the foreclosure crisis ricocheted dramatically on Friday, as the Labor Department released unexpectedly low job-growth numbers that pushed the unemployment rate back over 9 percent. The jobs report comes on the heels of both a devastating report that found housing prices hit new lows in March and warnings from economists that the tumbling real estate market threatens to drag the economy back into recession.

"The jobs numbers, they ain't pretty, man," economist Jared Bernstein told HuffPost. Bernstein left the Obama administration last month to join the Center on Budget Policy and Priorities, a highly respected left-of-center Washington think tank. "You don't wanna make too much out of one month, but when that month reflects other trends in the economy, you want to take note."

"The bottom line is that the job market simply isn't meeting the basic employment and income needs of working families," he said.

"This is an emergency," said Preeti Vissa, community reinvestment director of the Greenlining Institute, a foreclosure relief advocacy group. "The ongoing foreclosure crisis is well on the way to dragging the whole economy into a double-dip recession if strong action isn't taken immediately."

The connection between the foreclosure crisis and rampant unemployment is well known by economists and the administration. Diving home values and heavy debt burdens force cutbacks in both consumer spending and tax revenue for local governments. These reduced spending levels and lower government revenues force layoffs in both the public and private sector. And those layoffs, in turn, spur more foreclosures. A July 2010 report from the International Monetary Fund suggested that foreclosure problems added 1.25 points to the unemployment rate -- or more than 10 percent.

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Republicans Pass Measure Blocking TSA Unionization

If anti-labor forces in Washington are nothing else, they are persistent. Yesterday the House of Representatives narrowly passed a Republican amendment to the Department of Homeland Security budget which would prevent thousands of airport screeners from forming a union, a right they won only months ago after a bruising Senate fight.

Employees of the Transportation Security Administration are currently voting in a runoff election to determine whether the American Federation of Government Employees or the National Treasury Employees Union will represent them.

But late Wednesday, Rep. Todd Rokita, a Republican from Indiana, offered an amendment to the Homeland Security bill that would prevent any federal funds from being used for collective bargaining by the TSA, citing national security concerns. “Collective bargaining agreements would hamper the critical nature of TSA agents’ national security responsibilities,” Rokita said on the House floor. “Union demands will unquestionably make our transportation security more costly and less efficient.”

The amendment passed by a narrow 218-205 margin, with 18 Republicans defecting from an otherwise party-line vote. Rokita’s national security rhetoric echoed Republican tactics from a debate in the Senate earlier this year, which narrowly defeated two measures that would have prevented TSA unionization.

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WikiLeaks Cables Reveal "Secret History" of U.S. Bullying in Haiti at Oil Companies’ Behest

The Nation magazine, in partnership with the Haitian weekly newspaper, Haïti Liberté, has launched a series of reports based on more than 19,000 classified U.S. diplomatic cables released by WikiLeaks. Called "The PetroCaribe Files," the series begins with an exposé of how the United States—with pressure from Exxon and Chevron—tried to interfere with an oil agreement between Haiti and Venezuela that would save Haiti, the poorest country in the Western Hemisphere, $100 million per year. "It is really amazing to see an ambassador pushing around a president, and all his officials telling them what to do, trying to tell them what Haiti’s interests are. It is the epitome of arrogance," says the report’s co-author, Kim Ives. We are also joined by veteran Haiti correspondent, Dan Coughlin.

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Bigger Commons? Bad choice

This government’s first major legislative proposal is about the worst choice our new Parliament can make. What Canadians need least is a larger House of Commons and an upper house of any kind – elected or appointed.

Despite rationalizations of expanding the Commons so that growth regions will have more equitable representation, that is not the motive at all. This proposal is not primarily to give them more MPs. It is designed to prevent regions with static or declining populations from having their representation cut.

That has been the driver in reapportioning the Commons since the 1970s, when all parties bought the expediency of enlarging the total number of MPs so that provinces would not lose representation – and hence, clout – if their populations fell.

Redrawing the electoral map could not be avoided because the Constitution requires redistribution after a census. But there was no constitutional limit on the total size of the Commons. Ergo – just increase the total membership and keep everyone happy, or at least quiet.

Well, why not? The first reason is that it is not necessary for giving the people adequate representation. The average member of the U.S. House of Representatives represents more than 400,000 voters. While our American neighbours are never backward about coming forward with political protest, none of them even whispers that they need more politicians in their lower house. Why must Canadians smoke this propaganda drug that the more MPs we have, the happier we’ll be?

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Secret US Forces Carried Out Assassinations in a Dozen Countries, Including in Latin

Pulitzer Prize-winning investigative journalist Seymour Hersh created a stir earlier this month when he said the Bush administration ran an "executive assassination ring" that reported directly to Vice President Dick Cheney. “Under President Bush’s authority, they’ve been going into countries, not talking to the ambassador or to the CIA station chief, and finding people on a list and executing them and leaving,” Hersh said. Seymour Hersh joins us to explain.

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Despite Intelligence Rejecting Iran as Nuclear Threat, U.S. Could Be Headed for Iraq Redux

In his latest article for The New Yorker magazine, Pulitzer Prize-winning investigative journalist Seymour Hersh says the United States might attack Iran based on distorted estimates of Iran’s nuclear and military threat—just like it did with Saddam Hussein’s government in Iraq. Hersh reveals that despite using Iranian informants and cutting-edge surveillance technology, U.S. officials have been unable to find decisive evidence that Iran has been moving enriched uranium to an underground weapon-making center.

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65% of Torontonians say no to road tolls; 72% want bike lanes

Torontonians strongly oppose using road tolls to pay for Mayor Rob Ford’s planned — but unfunded — Sheppard subway line, says a new poll.

Forum Research’s automated telephone survey of 1,050 Torontonians conducted Wednesday found, however, strong support for Ford’s soon-to-be-released plan to put physically separated bike lanes on some downtown streets.

On tolls, the idea of charging drivers on main thoroughfares remains a non-starter with the public, said Forum president Lorne Bozinoff.

Some 65 per cent of respondents said they don’t support tolls to pay for the Sheppard line. When rephrased as road tolls to reduce traffic congestion, the support was only slightly higher, at 43 per cent.

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Hard Lessons

The rules are a little different in Penny Smeltzer’s classroom, a portable trailer at Westwood High School in Round Rock. When student messengers come from the main office, they recite a quotation—anything goes, from a sports star to a 17th-century English poet. Her students smile with her when she demands the quotations. They shrug good-naturedly when she urges them to turn in their textbooks so they won’t have to wait in long lines. “You are the generation that plans to wait till the last minute,” she says, her Michigan accent strong after 30 years in Texas. “It’s your senior year. Go to the lake.”

Smeltzer has spent nine months pushing her students hard, with one goal: perform well on the advanced placement statistics test. “I do not stop,” she says. “We go bell to bell.”
On this cool, sunny Friday in mid-May, the class can relax. It’s the first time they’ve seen Smeltzer since the exam Wednesday. “[The exam] wasn’t as in-depth as any class period that we had,” one student says. Smeltzer tells the class that sometimes the tests are graded harder if the questions are easy.

“Oh, no,” one boy says as others agree. “I don’t think your average statistics student in Mississippi would get them right.”

The students aren’t just saying that to make their teacher happy. Smeltzer’s one of the best AP Statistics teachers in America, with lists of awards to prove it. She’s been from coast to coast and to Singapore teaching other teachers how to get kids excited about math. Smeltzer recruits AP Statistics students wherever she goes—grocery stores, school plays, anywhere she sees a parent or high-schooler. Once they’re in her class, she finds a way to prepare everyone. “If they’re not understanding a manufacturing problem about quality control in statistics,” she says, “then maybe what I need to do is talk about the price of prom dresses.”

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Postal strike begins

OTTAWA — In Winnipeg, 150 postal workers walked off the job Thursday night bringing the possibility of a wider strike closer to fruition.

"We just walked out at the main plant. We've got the whole entire shift off in Winnipeg," Brett Drabot, a member of the CUPW Winnipeg local's executive board told Postmedia News.

Spokespeople for both the union and Canada Post said earlier they didn't expect a deal would be reached before 11:59 p.m. ET that would avoid a strike — meaning no mail will be delivered in Winnipeg on Friday.

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Michael Bromwich Spars With House GOP Over Gulf Oil Spill Response

WASHINGTON -- The Interior Department's Michael Bromwich on Thursday pushed back against GOP lawmakers who denounced the administration for its response to last year's oil spill in the Gulf of Mexico, and rejected Mississippi Gov. Haley Barbour's (R) contention that the moratorium on deepwater drilling is too burdensome for residents.

In a hearing before the House oversight committee, Bromwich, the Interior Department's top drilling official, defended the Obama administration's handling of Gulf Coast recovery efforts even as Barbour insisted the federal drilling ban enacted by the Obama administration was more harmful to the Gulf Coast economy than the spill itself.

"While we and many others will continue to monitor and analyze events and readings from the Gulf to learn if some currently unrecognized or future development changes the situation, it appears the Gulf has essentially digested the oil and other chemicals thus far," Barbour said in a statement Thursday. "Further, in our state, on-shore impacts were quickly remediated, and there is no apparent residual environmental damage."

Barbour said there have been more than 31,000 oil wells drilled in the Gulf of Mexico in the last 50 years and that nothing like the last year's spill, which killed 11 rig workers and dumped almost five million barrels of oil into the Gulf, has ever happened before.

"The president's commission says that that's not so," countered Bromwich, noting there have been dozens of similar incidents in the past 15 years.

“They cite 79 incidents of loss of well control ... between 1996 and 2009," Bromwich said. "So another way to describe that is 79 near-misses, 79 almost-Deepwater Horizons. So without going into the details of each one, that's what the president's commission found. So to say that the risk is one in a million, or one in 'x'-thousand of deepwater wells drilled is not accurate."

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For-Profit College Stocks Soar, Indicating New Regulations Won't Hinder Industry Growth

NEW YORK -- Amid dueling assessments of the impact of new federal rules aimed at cracking down on abuses by for-profit colleges, the stock market delivered a clear verdict: business as usual.

Shares for every publicly traded college corporation made gains on Wall Street Thursday, with share prices at many of the largest corporations, including Education Management Corp. and ITT Educational Services Inc., soaring more than 20 percent by the end of the day.

"The changes we saw this morning generally surpassed what most investors were considering likely," said Jarrel Price, an analyst who covers the for-profit education sector at Height Analytics LLC. "For the majority of the sector, programs are going to avoid what were potentially very severe restrictions on their enrollment growth."
But despite the indications from the market, there was still a geyser of rhetoric in Washington on after the Obama administration released a significantly weakened package of regulations meant to protect students from unsustainable debt burdens at for-profit colleges and career training schools.

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Republican Presidential Candidates To Address Evangelical Christians At Faith And Freedom Coalition

WASHINGTON, D.C. – When the Faith and Freedom Coalition kicks off its annual conference on Friday with a who's who lineup of conservative political speakers, it will be a coming out for a little-known organization aiming to become a powerful new force of the religious right.

Almost every single Republican who has either announced a presidential primary run or is expected to do so will attend the group's two-day event in Washington, D.C.

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Scott Walker Tries To Cut Men Out Of Wisconsin Family Planning Program

Greg Hartman was waiting tables to support himself through college in the fall of 2010 when his hometown of Manitowoc, Wisc., experienced an outbreak of HIV and the hepatitis C virus. After finding out his best friend had been infected with hepatitis, the uninsured 22-year-old decided he needed to get checked out as well -- but the tests were going to cost him more than $300 out of pocket.

"There's no way I could have afforded it on my own," said Hartman, who brings in only $150 to $200 a week from his restaurant job.

Hartman said he went to the University of Wisconsin's campus health care center and applied for BadgerCare -- the state's Medicaid-funded family planning program, which reimburses low-income men and women for sexually transmitted disease testing, birth control services, cancer screenings and other preventative reproductive care. Through BadgerCare, Hartman was able to afford to get tested for both HIV and hepatitis C -- he tested positive for the latter.

"If I didn't qualify for BadgerCare, I would have just said 'fuck it' and not gone into the clinic in the first place," he told HuffPost. "I would never have known I had hepatitis."

Although the BadgerCare family planning program doesn’t cover Hartman's treatment, he was able to afford two different HIV tests, a liver panel and potentially life-saving hepatitis tests through the subsidized program.

But the nearly 7,000 other low-income Wisconsin men who use BadgerCare may soon be out of luck. Scott Walker, the state's Republican governor, has proposed eliminating men entirely from the program in his latest budget bill. That move could cost Wisconsin all of its federal family planning funds, policy experts warn.

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Tea Party: Drug Tests for Everyone!

Although random drug testing has not been a big issue over the past few years, Florida is determined to bring it back to life. This past week, Florida adopted two new drug testing requirements: one imposed on welfare recipients and the other on state employees. The irony is that these quintessential illustrations of Big Government were promoted by the Tea Party and one of its darlings, Governor Rick Scott.

Wasn't the Tea Party all about restoring limits on our government and protecting our constitutional rights?

The U.S. Supreme Court has repeatedly held that government-mandated drug testing is a "search" governed by the Fourth Amendment to the Constitution. That provision says in part: "The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated" and mandates that government have "probable cause" before a search warrant is authorized. Random drug testing is what is known as a "suspicion-less" search. Even without probable cause to believe the person required to pee in a cup has done anything wrong, he or she is forced to turn over bodily fluids for government inspection.

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Chrysler Will Soon Sever Ties With U.S. Government

DETROIT — Chrysler Group LLC, newly profitable and confident in its revamped products, will soon sever its ties with the U.S. government after most – but not all – of the bailout loans it got two years ago are repaid.

Italian automaker Fiat SpA agreed late Thursday to buy the U.S. Treasury's 6 percent interest in Chrysler for $500 million. Once the deal closes, the government will no longer hold a stake in the auto company. Treasury officials said it could take up to three months to make sure the agreement meets regulatory approvals, but it will likely close more quickly than that.

The deal will give Fiat a majority 52 percent stake in the automaker, just two years after it agreed to manage Chrysler after its bankruptcy.

President Barack Obama is expected to announce the agreement Friday during a trip to a Chrysler facility in Toledo, Ohio.

The U.S. government will ultimately lose around $1.3 billion in the deal. The government authorized $12.5 billion in loans for Chrysler from the end of 2008 through Chrysler's bankruptcy filing in the summer of 2009. The Treasury Department said Thursday that Chrysler has repaid $11.2 billion – including $2 billion in undrawn loans – but it is unlikely to recover the rest. Government officials have long said that they didn't expect to recover the full amount they loaned to Chrysler and General Motors Co. during the auto industry downturn, and that their top priority was saving thousands of auto jobs.

"We didn't do this to maximize return. We did it to save jobs," Treasury Secretary Timothy Geithner said during a trip to Detroit in April. On Thursday, Geithner noted that GM and Chrysler are hiring again and making new investments at U.S. plants, which wouldn't have happened had they gone bankrupt.

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Justice Scalia's Overheated Dissent

"Terrible things [are] sure to happen," including many "murders, robberies, and rapes."

That was dissenting Justice Antonin Scalia's dire prediction on May 23, when by a 5-to-4 vote the Supreme Court sort-of-ordered California to reduce its prison population of about 150,000 by 37,000 as a remedy for "cruel and unusual" denial of medical care to inmates.

Thirty-seven thousand hardened criminals loosed among us! Soaring rates of murders, robberies, and rapes!

I don't think so. For two reasons.

First, 37,000 prisoners are not going to be released anytime soon, if at all, as a result of this decision. Lost in the noise was the majority's strong suggestion that the lower court extend from two to five years California's deadline for reducing its prison population. Also drowned out was the majority's hope that the state may find ways to fix prison medical care with no mass release at all.

Second, while several thousand prisoners have already been released early and thousands more will be, many or most of these will be minor, nonviolent, non-dangerous drug offenders and the like who should never have been given long prison terms in the first place.

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Ottawa shouldn't rely on private economic forecasts

The Parliamentary Budget Office has decided to start producing its own economic forecasts (pdf). This is welcome news, but not because the PBO can be expected to make exceptionally good forecasts.

Firstly, the PBO publishes error bands representing its uncertainty about how the economy will evolve. This is a continuation of a promising trend; the Bank of Canada already provides ‘fan charts’ for its inflation forecasts, and it would be a good thing if more forecasters did the same.

Secondly, the fact that the PBO has now started producing forecasts should put some pressure on the Department of Finance to -- as former senior Finance official Peter DeVries puts it -- “take full responsibility for the economic and fiscal forecasts presented in its budgets and economic and fiscal updates.”

The political advantages of outsourcing forecasting to the private sector are clear enough: it deprives the opposition of a whole category of potential talking points. Questions about the underlying assumptions behind the budget projections can be neatly deflected to the consensus forecast.

But aside from that, the current practice of using a consensus of private-sector forecasts is difficult to defend. I noted in an earlier Economy Lab post that private-sector forecasters have an agenda of their own that can affect the quality of the consensus forecast. And as Mr. DeVries notes, the number of forecasters who are able to produce the sort of medium-term projections necessary for the budget is very small; only three such organizations participated in the 2010 budget. Most private-sector forecasters focus their attention on the short term.

More fundamentally, it doesn’t make much sense to use a consensus of projections made under the assumption of no policy changes as a basis for forecasting what will happen after new measures are implemented. The Department of Finance has the expertise and the resources to provide forecasts that are consistent with the government’s policy initiatives. It should do so.

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Conservatives seek ‘fairness’ in reallocating Commons seats

Stephen Harper’s Conservatives want to move closer to a one citizen, one vote system to “see some fairness” for provinces whose populations are increasing, Government House Leader Peter Van Loan says.

Speaking to reporters in advance of the House getting back to work Thursday, Mr. Loan said some votes are not worth the same as others – and this is undemocratic.

“What has happened is that we’ve have had a situation arise where votes are worth very different amounts across the country,” he said. “This is because the existing formula restrains the growth of seats in areas that are experiencing high growth, particularly in Ontario, Alberta, British Columbia.”

Mr. Van Loan was reacting to a report in The Globe and Mail that revealed the government wants to increase seats in the House of Commons to 338 from 308. The additional seats would go to Alberta, Ontario and British Columbia.

Legislation on this initiative would not be introduced immediately, Mr. Van Loan said. “It’s a fundamental principle of democracy to move closer to equal weight for [voters].”

But Quebec – and this could be where the Tories are vulnerable – would not see any increase from the 75 seats currently allotted to the province.

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