Using darkening colors as  joblessness rises, this video shows the effect of increasing unemployment across the United States, county by county, since February, 2007.

The Ugly Color of Unemployment

--------- Tula Connell --------- Photo by Joe Kekeris

By Tula Connell
AFL-CIO Managing Editor

Back home in Oklahoma, Republican Sen. Tom Coburn must really be feeling the heat from some of the millions of America’s jobless worked he shafted last week. Coburn, who blocked a short-term extension for unemployment insurance (UI), issued a press release making it look as though Senate Democrats blocked the extension and he was a helpless victim of the vote. He’s also sending out the same info to those who, like some AFL-CIO Now blog readers, sent him scathing letters for his mean-spirited move.

In short, Coburn’s spin is: Wrong. Wrong. Wrong. 

In fact, Coburn blocked the emergency UI extension bill, effectively killing it until after the Senate returns from break April 12. Some 200,000 jobless workers a week will now lose UI support because of Coburn. Worse, Coburn has said he would continue to block UI extension after the Senate returns. 

Coburn also disingenuously states the best solution for jobless workers are jobs. 

So why then did Coburn vote against the jobs package passed by the Senate earlier this month? 

See, Senator, jobs are a great solution. The problem is, there are more than six U.S. workers for every one job. More than two in every five unemployed workers in this country have been unemployed for more than six months. That means jobs need to be created. And because the private sector isn’t creating them, the federal government needs to step in. 

Until there are enough jobs for workers without jobs, workers desperately need a helping hand like unemployment insurance and COBRA, to get by. 

One that Coburn isn’t willing to give them. 

Here’s Coburn’s online contact page. Drop him a line and tell him if he can’t take the heat… 

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Re-posted from the AFL-CIO Blog

Mike Hall

 By Mike Hall
AFL-CIO Senior Writer

Arrogance allows you to do just about anything and think you can get away with it. For years, health insurers have swaggered about, callously raising premiums through the roof, dropping sick people from coverage and refusing to cover folks with pre-existing conditions. They got away with it. But not yesterday.

After media reports surfaced that big insurance companies claimed a loophole in the new health care reform law would allow them to deny coverage to children with pre-existing conditions, the—well you know—hit the fan. Picking on sick kids is like kicking a dog or stealing Grandma’s purse. It doesn’t sit well with most Americans.

After mounting public outrage and a strongly worded letter from Health and Human Services Secretary Kathleen Sebelius, the insurance industry quickly reversed course and promised to cover kids with pre-existing conditions beginning Sept. 23 as the new law requires. In a letter to the industry group American Health Insurance Plans (AHIP), Sebelius wrote:

Health insurance reform is designed to prevent any child from being denied coverage because he or she has a pre-existing condition…Now is not the time to search for nonexistent loopholes that preserve a broken system.

To ensure that there is no ambiguity on this point, I am preparing to issue regulations in the weeks ahead ensuring that the term ‘pre-existing condition exclusion’ applies to both a child’s access to a plan and to his or her benefits once he or she is in the plan.

In response, AHIP President Karen Ignagni wrote:

We await and will fully comply with regulations consistent with the principles described in your letter.

But she also wrote that insurance companies would be analyzing how much it would cost to comply-code words for “rate hike.”

At FireDogLake David Dayen lays out a likely scenario.

You can pretty much figure out AHIP’s game here. With no restrictions on cost until 2014, the industry can raise their premium prices almost at will. Even the bad publicity suffered from that 39 percent rate hike of Anthem Blue Cross plan has stopped that scheduled increase from taking effect in May. And when outrage is expressed by families facing double-digit rate hikes, AHIP will clear their throats and blame the pre-existing condition exclusion for exclusion for children, forcing the poor insurance companies to take on a sicker risk pool and raise prices to survive.

It takes a long time to beat down world class arrogance.

This report from the Real News Network describes the United Steelworkers’ strike against Vale Inco in Canada. It reports on the history, a huge rally conducted in March and the lastest developments involving Vale Inco’s hiring of scabs.

Robert Kuttner

Robert Kuttner
Co-Founder and Co-Editor of The American Prospect

It was a pleasure to see President Obama exercise some leadership and muscle towards health reform, and more recently to pass a true “public option” for student loans. Apparently, the experience of leadership felt good, for the president decided to follow up by deciding to damn the torpedoes and making fifteen recess appointments, including Craig Becker to breathe some life into the National Labor Relations Board.

Now, we need to see a similar display of presidential leadership on financial reform. The bill that passed the House last December is far too weak on all of the key issues. Gigantic banking conglomerates will remain “too big to fail.” There is no separation of commercial banking from investment banking or proprietary trading, nor meaningful reform of corrupted credit rating agencies. Regulation of derivatives such as credit default swaps is far too weak. Private equity companies and hedge funds are largely left alone. There is no serious reform of executive compensation. The next generation of bubbles is already incubating while we are still recovering from the damage of the previous one.

The Dodd bill that will come before the full Senate later this spring is slightly worse in some respects, slightly better in others. The bill does include a version of Obama’s call to restore the Glass-Steagall wall between commercial and investment banking (the “Volcker Rule”); but where the House bill created an independent consumer financial protection agency, the Dodd bill places this new agency, of all places, in the Federal Reserve. It was the Fed’s total failure to enforce consumer protections on the books that invited the abuses that caused the collapse.

The bankruptcy examiner’s revelations in his 2,200 page report about the behavior of Lehman Brothers should cause the White House to rethink its entire approach to financial reform. Basically, Lehman Brothers cooked its books for a few days four times a year, so that its quarterly reports would make the firm look far more solvent than it actually was. It used repurchase agreements (“repos”), which are short term loans, to disguise $30 to 50 billion worth of liabilities. This balance-sheet manipulation began in 2001, according to the examiner, Anton Valukas.

This kind of behavior demonstrates the failure of three separate systems that are supposed to protect investors, creditors and the larger economy from willful corporate fraud. First, the Securities and Exchange Commission, which actually had personnel investigating Lehman at the time, and utterly missed what was going on right under the commission’s nose, in a lapse comparable to the Madoff scandal.

Second, Lehman’s outside auditors, Ernst and Young, failed to blow the whistle. These abuses mostly occurred after Congress enacted the 2002 Sarbanes-Oxley Act, explicitly to improve corporate auditing in the wake of the Enron fraud. Obviously, though corporate lobbies have been complaining that Sarbanes-Oxley inflicted too much red tape, the Lehman affair demonstrates that it is too weak to do the job. Auditors and executives, in principle anyway, are criminally liable for accounting fraud. But that did not deter Lehman from faking its books and Ernst and Young from going along.

According to the examiner’s report, despite the auditor’s acquiescence, Lehman was not able to find a law firm in the US to sign off on its bogus accounting. So Lehman went to the U.K., found a law firm, Linklater’s, to provide an opinion letter under British law okaying the dubious bookkeeping, and then ran the transactions through a London subsidiary.

One backstop, that has been weakened in recent years both by Congressional action and by Supreme Court rulings, is the right of investors or creditors injured by fraudulent behavior to sue. The original securities laws of the Roosevelt era envisioned that this kind of litigation–”private right of action”–would keep both corporations, their auditors and the SEC honest. But bipartisan legislation in the 1990s and two major Supreme Court decisions on 1994 and 2008 have effectively eliminated liability for aiding and abetting securities fraud. You can be sure if this right were still available, Ernst and Young would have though twice about giving Lehman a clean bill of health.

The politics of financial reform are drastically different from the politics of health care reform. For starters, Wall Street is massively unpopular in the country. By contrast, in the case of health care, some of the bill’s own weaknesses – the mandate, the diversion of Medicare funds, the tax on premiums of high-quality insurance – raised legitimate questions among many voters; Republicans succeed in creating lies about the bill (pulling the plug on Grandma, etc.) that only multiplied concerns. In the end, passing the bill was a genuinely difficult vote for many Democrats.

Financial reform is a whole other story. It’s not a difficult vote to tighten restrictions on predator banks (except when it comes to campaign finance). Judging by the recent comments of Senator Bob Corker, one of the senior Republicans on the Senate Banking Committee, Republicans are genuinely worried about finding themselves on the wrong side of a populist issue if they try to block financial reform the same way they tried to block health reform.

On financial reform, the real problem is not the Republicans–but whether Democrats will be tough enough. They have far more political room to force the Republicans to take a difficult vote than they are exercising. A cynic might think that Democrats such as Chris Dodd and Chuck Schumer are more worried about keeping Wall Street and the Fed happy than about maximizing the moment for reform and demonstrating to regular Americans which side they are on.

And if President Obama wants to appeal to bipartisanship, here is an area where bipartisanship can actually go hand in hand with good government. One example is the amendment to require an independent audit of the Federal Reserve, which was cosponsored by one of the most progressive Democrats in the House, Alan Grayson of Florida, and the libertarian Republican Ron Paul of Texas. With the support of over 300 House Democrats, that bipartisan provision made it into the final House bill.

Another good bipartisan bill was the Fraud Enforcement and Recovery Act, cosponsored by Democratic senators Ted Kaufman of Delaware, Pat Leahy of Vermont, and Republican Chuck Grassley of Iowa, the same Grassley who was part of the obstructions and myth-mongers when it came to health reform. But Grassley and other heartland Republicans are fed up with the double standard that places Wall Street ahead of Main Street. The Act, approved last May, helps–but does not fully restore the right of an injured investor or creditor to sue for damages in cases of securities, including those who aided or abetted a fraud, such as auditors who signed off on cooked books.

As Sen. Kaufman said in a recent floor statement,

“I’m concerned that the revelations about Lehman Brothers are just the tip of the iceberg. We have no reason to believe that the conduct detailed last week is somehow isolated or unique. Indeed, this sort of behavior is hardly novel. Enron engaged in similar deceit with some of its assets. And while we don’t have the benefit of an examiner’s report for other firms with a business model like Lehman’s, law enforcement authorities should be well on their way in conducting investigations of whether others used similar ‘accounting gimmicks’ to hide dangerous risk from investors and the public.”

A good place to start would be to require real audits, similar to the autopsy performed on Lehman Brothers, of all the banks that took taxpayer money under the TARP program. Anyone who thinks that this sort of cooking of books was confined to Lehman Brothers is a good candidate to buy the Brooklyn Bridge–or worse, a bond backed by a sub-prime loan. President Obama could accomplish audit this simply by directing his Treasury Secretary to do it.

Obama has at last discovered that the public expects him to lead; and that Republican whining about the perils of majority rule cuts no ice. His administration has now squandered more than a year, being far too soft on the Wall Street system that crashed the rest of the economy. Now, with his own stock risking, he can show his mettle by demanding much tougher financial reform and daring the Republicans to block it.

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Robert Kuttner’s forthcoming book is A Presidency in Peril (March, Chelsea Green). He is co-editor of The American Prospect and a senior fellow at Demos. In addition, he is the author Obama’s Challenge.

Dave Johnson

By Dave Johnson
Fellow with Campaign for America’s Future

When a policy is just wrong it’s just wrong. I have written about how Chinese CEOs and Chinese economists have been making the case for China to bring its currency up to market rates.

Even Chinese government officials are making the case for a stronger currency. In a must-read NY Times story, China Officials Wrestle Publicly Over Currency,

The current drama began on March 6 when the governor of China’s central bank stunned analysts by saying that the bank’s policy of keeping the renminbi at a constant exchange rate against the dollar was a “special” response to the global financial crisis.

The new description suggested to many economists that the current value of the renminbi was temporary and that the central banker, Zhou Xiaochuan, was preparing the Chinese public for a stronger renminbi.

Why is all of this discussion about Chinese currency coming to a head now?

The debate is far from academic. In the coming weeks, the Obama administration faces a series of politically charged deadlines set by Congress to decide whether to continue negotiating with China over currency and trade issues or to take a more confrontational stance and name China a currency manipulator.

If the administration labels China a currency manipulator, it would face further Congressional pressure to impose punitive tariffs on many Chinese goods.

Please read the entire NY Time story for its explanation of some of China’s internal tensions over the currency-rate problem. The Commerce Ministry is close to exporters who have been enjoying this manipulated advantage, and fights for their interests. The central bank has accumulated a vast store of foreign currency and would be blamed for the value drop of this pile of foreign cash as their own currency gets stronger. But the pile also means that the central bank cannot easily raise interest rates to fight rising inflation. Because of this inflation companies are starting to import and stockpile commodities. Etc. It’s a tense mess with the highest of stakes. (Yes, I feel the excitement of a thriller when I read about economics. My wife rolls her eyes.)

The Chinese government is trying to just manage all of these market forces instead of letting them operate as markets. The resulting imbalances are causing tremendous pressures – and bubbles – to build up both inside and outside of China. If China won’t resolve this as the danger to the world’s economy grows, the rest of the world must step in. On April 15 President Obama has an opportunity to start restoring balance to the world’s economy by declaring China a currency manipulator and taking steps designed to force them into balance with the rest of the world. Think of it as an intervention for their own good.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project.

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Johnson also is a fellow at the Commonweal Institute and a Senior Fellow at the Institute for the Renewal of the California Dream.

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Follow Dave Johnson on Twitter: www.twitter.com/dcjohnson

This video draws the contrast between President Obama’s vision of hope and change and the Republicans’ campaign of obstructionism and negativity.

Hope vs. Obstructionism

John Russo

By John Russo
Co-Director, Center for Working-Class Studies at Youngstown State University

The labor movement has historically been the most effective representative of working-class interests.  The short list of labor’s achievements include ending child labor; establishing the eight-hour day and minimum and “living” wages, unemployment insurance and workers compensation, occupational safety and health standards; securing health care, sick leave, vacations and pensions; and helping create legislation to outlaw job discrimination against women, minorities, disabled persons, and older workers.

Union members receive 15% more wages on average than non-union workers, are 19% more likely to have health insurance, and are 24% more likely to have an employer sponsored pension. Despite the clear correlation between overall compensation and union membership, a recent report by the Center for Economic and Policy Research shows that union membership has dropped in most states. According to the Bureau of Labor Statistics, just 12.3% of wage and salary workers belong to labor organizations. This amounts to drop of almost 9% over the last 25 years. The greatest declines in unionization rates have occurred in private sector and non-agricultural employment, including manufacturing and construction.

The decline is significant enough that it is undermining the labor movement’s ability to advance the interests of working people. The real strength of the labor movement has now moved to the public sector; public employees now constitute more than half of all union members. Perhaps because they now dominate the labor movement, public sector unionists have come under attack recently, and some expect membership levels to drop as a result of the current economic crisis, as schools, cities, and other public employers cut the work force in response to declining tax revenues.

Union membership has declined for a number of reasons, including globalization, changes in workplace organization (subcontracting, off-shoring, lean production), the growing proportion of part-time and contingent jobs, employer hostility, legal and political opposition to labor unions, and the ineffectiveness of business unionism to provide improvements in wages and benefits.

Overall public support for labor unions has also declined.  The Pew Center for the People and Press found recently that favorability ratings have fallen sharply in recent years.  While 58% of those polled in January 2007 viewed unions favorably, by 2010 only 41% held that view.  Negative views increased, from 31% in 2007 to 42% by 2010.  Importantly, the Pew study found declines in union favorability occurred at similar rates across most demographic groups. Further, a recent Gallup poll found that 51% feel that unions hurt the general economy more than they help it.  Only 39% saw unions as favorable to the economy.

While the labor movement remains vocal and active on the political front, declining numbers and shrinking public support are undermining labor’s influence within the Democratic Party, which has historically relied on organized labor as the core of its support.  In the past two years, almost every political initiative by organized labor, from support for a public option in health care to labor law reform to simply naming of new members to the National Labor Relations Board has been all but ignored or put on the back burner. In turn, labor support for the Democratic Party has become lukewarm and fragmented at best.

What will the Democratic Party look like without the labor movement at its center? Two visiting international scholars at the Center for Working-Class Studies believe that it will come to resemble comparable political parties in the UK and Germany. Sociologist James Rhodes suggests that like the British Labor Party, Democrats will abandon organized labor and working-class issues. Geographer Eva Viertlböck thinks that, like the German Social Democratic Party, the Democratic Party will break apart as labor unionists and former working- and middle-class supporters move to the ends of the political spectrum.  Michael Lind, writing for Salon, sees something similar. He suggests that labor unions are unlikely to regain their position at the heart of liberal politics. Instead, he believes that liberal interest groups and social elites using new technology will replace unions as the new core of liberal politics and the Democratic Party. That is, the Democrats will become a party that practices the “politics of charity” instead of the “politics of solidarity.”

None of this bodes well for working people. Despite attempts by organized labor to organize the unorganized both politically and institutionally, working people are looking elsewhere for agency and voice.  In some cases, they are supporting groups that seem antithetical to their needs but capture their anger.  In the last year, one of the questions I was asked most frequently by reporters is “Does the working class support the Tea Party Movement?”  While it is difficult to determine how actively working-class people are involved, it is clear that some do support the movement, and that support may be growing.

Given the demographic declines and shifting political landscape, the labor movement needs to become more closely aligned with various social and economic justice movements.  These groups share with organized labor the growing sense of economic vulnerability, frustration with government, and the shredding of the nation’s social safety net. Labor unions must move beyond workplaces issues, openly support the interests of all working people, and engage in community organizing on both local and regional levels.  Put differently, it must refocus its energy and mission and return to its traditional role of advocating for all working people.

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John Russo also is Coordinator of the Labor Studies Program in the Williamson College of Business Administration at YSU

Ian Fletcher

William BernsteinIan Fletcher

  By William J. Bernstein
author of  “A Splendid Exchange: How Trade Shaped the World”

and

Robert Reich

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

Few presidents get a second honeymoon of their own making. (George W. got one when terrorists attacked the United States.) Barack Obama’s victory on health care reform has breathed new life into his administration, recharged the Democratic base, and given the rest of America a sense of someone who fights for average working people.

The question now is: What does he do with his second honeymoon?

Some say it should be used to enact financial reform. Most Americans despise Wall Street and want to be assured there’s no repeat of the grotesque sequence of river-boat gambling with the economy followed by a taxpayer bailout followed by seven-and eight-figure bonuses. Democratic strategists would love to let Republicans hoist themselves on their own petard by defending Wall Street.

Financial reform surely needs bucking up. The bill passed by the House last year was riddled with loopholes, delays, and cop-outs for the Street. The one that’s emerging from the Senate Banking Committee is only slightly better. It still allows a world of unregulated derivative trading and hands the ball over to the same regulators who punted last time. It doesn’t even include Paul Volcker’s watered-down remake of the Glass-Steagall Act. And the Senate bill is likely to get even worse as Harry Reid and Chris Dodd troll for Republican support. In an election year when Wall Street money is flowing freely to both parties, watch your wallets.

Notwithstanding all this, the biggest Next Big Thing ought to be jobs.

Including all those who have entered the job market since the bottom fell out, the nation is about 11 million jobs short. The President ought to use his second honeymoon to get a jobs bill that will make a difference.

Although the official rate of unemployment for the third of Americans with college degrees — the kind of people who inhabit executive suites, the media, and Washington — is now down to 5 percent, most Americas inhabit a different job planet. The unemployment rate is 15.6 percent among Americans with less than a high school diploma and 10.5 percent for those with only a high school degree.

Even these rates understate the problem. Add in people working part time who’d rather it be full time, those too discouraged even to look for work, those working in a full-time job at fewer hours, and those who lost their jobs and have settled on new ones paying far less, and more than one in four of those without high school degrees are unemployed or underemployed; 22 percent of people with only high school degrees.

Considering that most households now rely on two wage earners (and most people tend to marry or cohabit with people who have roughly the same level of education they do) the situation is dire. A growing number of households have now sold off all their assets and exhausted their capacity to borrow from friends and relatives. That’s why the bad loans are still mounting: Households can’t meet their mortgage payments, can’t pay the rent, can’t meet payments on their credit cards and cars.

It doesn’t have to be this way. It’s this way because companies and consumers aren’t able or willing to buy nearly enough to get people back to work, and government hasn’t yet filled the shortfall. The stimulus was too small to begin with and its peak level of spending is now over.

In recent weeks, Congress and the Administration have been working on a bunch of proposals called “jobs bills,” but they’re so small relative to the size of the problem they should be called “almost jobs bills.”

One, recently passed, lets employers avoid paying payroll taxes for the rest of the year on each unemployed worker they hire (at a salary under $106,800), who has been out of work for at least 60 days. If the new hire remains at the job for at least 52 weeks, the employer can get a $1,000 tax credit on its 2011 tax return. The Congressional Budget Office estimated a similar payroll tax holiday proposal — not limited to workers who had been jobless for 60 days – would generate about 200,000 new jobs. With the 60-day limit, though, the number of hires is likely to be half that. Remember: The nation needs 11 million jobs just to catch up.

On Wednesday, House Democrats passed several other morsels they called “jobs bills,” whose likely effect on unemployment is even smaller. One would bestow about $3 billion of tax breaks on small businesses. Another would further expand what are known as “Build America Bonds,” designed to help states and cities with new construction projects. The tab here is about $13 billion. It’s a worthwhile effort but given that the states and cities are running up deficits of some $125 billion this year alone and firing everyone in sight — even teachers — it’s smaller than small potatoes. It’s a lima bean.

On Friday, the White House will announce a new program requiring lenders to temporarily slash or eliminate monthly mortgage payments for many borrowers who are unemployed, to no more than 31 percent of a borrower’s income (about what the borrower would be getting in unemployment benefits, if qualified), for up to six months. It’s another worthwhile step. But it deals with the symptom rather than the disease. The reason so many households can’t pay their mortgage is because someone has lost a job.

There is no great mystery about what the federal government needs to do. It must mount a frontal attack on unemployment proportional to the problem. At least another $300 billion in stimulus money is necessary. Some should go to the states and cities to restore cuts; some should be applied to the nation’s crumbling infrastructure; a portion should go to direct hiring (a new WPA).

This should be the Next Big Thing.

It won’t be easy. Most Americans don’t differentiate between temporary federal spending that’s necessary to get jobs back (which enlarges the current deficit) and permanent spending that’s built into federal programs (and creates big debt problems for the future). Many “moderate” Dems won’t even consider a second stimulus.

To accomplish it will require the President draw on his new store of political capital, mobilize his newly fired-up base, and capitalize on his renewed stature as a fighter for the people. But what’s a second honeymoon for if not for something the nation desperately needs?

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Cross-posted from Robert Reich’s Blog

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Robert Reich served as the nation’s 22nd Secretary of Labor and now is a professor of public policy at the University of California at Berkeley. His latest book, “Supercapitalism,” is out in paperback. For copies of his articles, books, and public radio commentaries, go to www.robertreich.org.