Will economic conservatives learn any lessons from this crisis?

Merits and analysis of Obama’s housing plan aside, I’m particularly interested in this bit of Republican rhetoric I’m seeing.

From Politico.com:

The GOP, perhaps predictably, was less enthusiastic. House Republicans released statements, suggesting Obama’s plan rewarded irresponsible borrowers at the expense of the vast majority of homeowners who pay their monthly bills on time.

[…]

He objected most to the main theme of the foreclosure plan – using monetary incentives to spur lenders and borrowers to do the right thing.

“The biggest outrage is that the president’s plan actually will use taxpayer money to pay people to do what they are already supposed to do – pay their mortgage,” Shelby said. “It also uses taxpayer money to pay banks to do what they should already be doing – modifying mortgages.”

So the mass job layoffs aren’t their fault, but people who are struggling to pay their mortgages are “irresponsible” and aren’t “doing what they’re supposed to do” by paying their bills–in other words, their non-payment is “their fault”? I guess in their perspective, you ought to be able to pay your bills with or without a job!

The Republicans seem willing to say that the economic downturn (and thus layoffs, increased credit card rates, and lower lines of credit) is beyond people’s control, but the impact of the economic downturn (housing foreclosures) somehow isn’t.

Their rhetoric also removes any blame for the abusiveness of the mortgage industry on the industry and solely in the hands of “irresponsible” Americans.

I also find it interesting that they claim that this is what the mortgage industry should be doing anyway, yet they don’t want any regulation making them do it and in the absence of such regulation, don’t want the government to incentivize good behavior they “ought to” be doing anyway? If it’s less advantageous to them financially, why on earth would they do it? Since when did the financial industry grow a conscience?

These statements are fascinating to me as well, because I have been wondering myself if our current economic crisis might change the way we think about, talk about, and approach public policy regarding the unemployed and working poor. (more…)

Published in: on February 19, 2009 at 2:15 pm  Comments (1)  

Bailouts and the corporate form

Some things have really been bothering me about the auto bailout talk vis-a-vis the financial sector bailout, and especially the recent Citigroup bailout.  

First, I agree with Rachel Maddow that something seems off when the (white collar) financial sector can get a quick bailout with few strings attached with no blame placed on employees and CEOs compensation structure (or any suggestion that it be revamped to take the federal funds), but in the case of the auto manufacturing sector, the quick blame is placed on the unionized workers, with their outrageous expectation for health care and decent wages.  These worker “demands” are unreasonably passed on to consumers in the form of higher vehicle prices, according to conservatives like Cal Thomas, and that’s the real reason US car manufacturer’s cannot compete. Meanwhile, CEOs still rake in overly inflated incomes, benefits, stock options, and other perks instead of lowering vehicle prices so as to not “pass on” health care costs to the consumer.  Be sure to check out this excellent analysis of the cost-per-employee figures being used to blame union labor.  

Class warfare, indeed.  I don’t mind criticizing compensation structure, but how is unionized labor being blamed for the failure of the auto industry?  What about the auto CEOs?  And finance CEOs compensation is irrelevant to their bailout?  This is akin to blaming welfare to the poor for the economic strain on the middle class, while the average compensation for an S & P 500 CEO in 2007 is projected to have been $14.2 million; in 2006 the average Fortune 500 CEO received $10.8 million, which is 364 times the average worker.  In 2007, the Ford CEO’s total compensation was $21,670,674, and GM’s CEO’s was $14,415,914.  The average of auto worker’s wages (not the pay of the average worker, but the average of workers’ pay) is $20.53/hour, or $42, 702/year–just below the median income.  And it’s the unions’ fault?

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Second, (more…)

Published in: on December 4, 2008 at 8:07 pm  Comments (3)  

Income disparity and “Middle Class” assumptions

I had wanted to write about the concept of the middle class and “who counts” back when McCain was criticizing Obama’s tax plans and Palin was self-labeling as a middle class American to explain why those media elites are against her, you betcha. At the same time, I have been teaching Sociology 101 for the first time (after majoring in it in undergrad), which obviously involves a lot of discussion over class, economic inequality, the meritocracy myth, the race-class connection, among other things that are the elephant in the room when addressing income, poverty, and taxation in the United States.

But teaching kept me I was super busy at the time, so I missed the opportunity to write about the realities of American’ income back then, but I have been given another chance with a recent Factcheck.org update, raising the issue of taxes and the poor that I want to discuss. I also thought it would be the perfect lead-in for my new blog, “Speak Truth to Power”, which will focus on social justice and issues of institutional inequality that I am interested in, but seem out of place on Don’t Ya Wish Your Girlfriend Was Smart Like Me?, my gender-sexuality cultural analysis blog.

So without further adieu, I want to delineate a few thoughts about income, the “middle class”, average Americans, and economic disparity. This first part goes back to those campaign moments that bothered me so. The second part takes a look at who exactly are the middle class. And the next parts will touch on issues of taxation, poverty, entitlement, and socialism that came up in the campaign and will not die.

1. During the first presidential debate, McCain made the following comment:

I know that the worst thing we could possibly do is to raise taxes on anybody, and a lot of people might be interested in Senator Obama’s definition of “rich.” (you can simultaneously read the transcript and watch the video here; clip begins at 11: 25 and the exact comment is made at 18:55). (more…)

Published in: on November 15, 2008 at 12:46 am  Leave a Comment