Stimulus bill anniversary thread

It’s been a year since President Barack Obama signed the American Recovery and Reinvestment Act (better known as the stimulus bill) into law. I didn’t like the early concessions Obama made to Republicans in a fruitless effort to win their support for the stimulus. I was even more upset with later compromises made to appease Senate conservadems and Republican moderates. They reduced spending in several areas that had real stimulative value (school construction funds, extra money for the Low Income Home Energy Assistance Program, aid to state governments) in order to include tax cuts that have much less stimulus “bang for the buck.” Senator Tom Harkin was right to question why 9 percent of the stimulus bill’s cost went toward fixing the alternative minimum tax, for instance.

Still, I supported passage of the stimulus bill. In late 2008 and early 2009 the U.S. economy was losing 600,000 to 700,000 jobs per month. Something had to be done. On balance, the stimulus did much more good than bad. Economists agree it has saved or created a lot of jobs:

Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.

Two and a half million jobs isn’t enough to compensate for the 8 million jobs lost since this recession began, but it’s a start.

Not only did the stimulus create jobs, it greatly increased spending on programs that will have collateral benefits. Incentives to make homes more energy efficient will reduce greenhouse gas emissions and save consumers money that they can spend elsewhere. Money for sewer improvements will provide lasting gains in water quality (inadequate sewers and septic systems are a huge problem in Iowa). The stimulus included $8 billion for high-speed rail. It wasn’t nearly enough, of course; we could have spent ten or twenty times that amount on improving our rail networks. But that $8 billion pot drew $102 billion in grant applications from 40 states and Washington, DC. The massive demand for high-speed rail stimulus funding increases the chance that Congress will allocate more funds for rail transportation in the future.

Unfortunately, most Americans don’t believe the stimulus bill created jobs. That’s largely because unemployment remains at a historically high level of 10 percent nationwide. Also, inflation-adjusted average weekly earnings have gone down during the past year. In addition, Republicans have stayed on message about the worthlessness of the stimulus bill, even though scores of them have hailed stimulus spending in their own states and districts.

Democrats on the House Labor and Education Committee released an ad that lists various popular stimulus bill provisions, such as increasing Pell Grants and teacher pay. The ad uses the tag line, “There’s an act for that,” naming the American Recovery and Reinvestment Act at the end. I don’t think it’s effective, because the ad doesn’t include the word “stimulus.” Few people will realize that the ARRA refers to the stimulus bill.

Bleeding Heartland readers, how do you view the stimulus one year later?

Continue Reading...

Recession Widens Gap Between Rich and Poor

(Click here for more on growing income inequality in the U.S., and note that the U.S. has now fallen behind Europe in terms of economic mobility. - promoted by desmoinesdem)

Crossposted from Hillbilly Report.

It seems like the one constant that can be depended on in this country anymore in good times or bad is the fact that working folks are working harder and harder and simply are not getting ahead. Even before the Republican recession last year wages have stagnated for decades and the gap between rich and poor has only widened as our middle-class continues to shrink. New numbers show that while incomes across the board have fallen, the recession has once again hit middle and lower class working Americans the hardest.  

Continue Reading...

Labor Day links and events coming up this week

Hope you’ve been enjoying the perfect Iowa weather during this holiday weekend. The U.S. Department of Labor and Blog for Iowa provide background on the history of Labor Day.

Organized labor doesn’t have a lot to celebrate right now, with more job losses in the manufacturing sector and unemployment rising across the country (though Iowa’s unemployment rate is significantly lower than the national average). The Iowa Policy Project finds that “the state of working Iowa” is not good. As in the previous recession, we are losing jobs with good benefits as wages stagnate for the people who still have jobs. We now rank 32nd in terms of median wages, and lower incomes mean less money for consumers to spend at other businesses. Click here for the full report, which also explains that “policy makers could do more to make work pay for low- and moderate-income working families and to insist upon job-quality requirements in economic development strategies.”  

Iowa hasn’t adopted most of organized labor’s key legislative priorities in recent years, in part because of the “six-pack” of Iowa House Democrats that blocked those bills. On the plus side, Curt Hanson’s victory in the House district 90 special election means we haven’t lost any ground on this front. We only need to persuade one or two “six-pack members” (or defeat them in Democratic primaries) to find the 51st vote for “prevailing wage,” for instance.

I haven’t heard much lately about Senator Tom Harkin’s efforts to find a compromise on the Employee Free Choice Act. Getting 60 votes in the Senate for anything meaningful is likely to be quite difficult. The Service Employees International Union has some news related to the EFCA here.

Two years ago I attended the Solidarity Fest Labor Day celebration in Des Moines, featuring John Edwards and Hillary Clinton. The same event, sponsored by the South Central Iowa Federation of Labor, AFL-CIO, takes place today in the 4-H building at the State Fairgrounds from noon to 2 pm. Later today, the Friends of Iowa Midwives are having a family-friendly potluck picnic at Raccoon River park in West Des Moines (4 to 8 pm, suggested donation $5).

After the jump I’ve posted details for lots of other events coming up this week.

Continue Reading...

Minimum wage laws should cover all disabled workers

The Des Moines Register’s Clark Kauffman wrote a must-read piece for today’s paper about a bunkhouse for mentally disabled men at the Johnson & Johnson Egg Farm near Goldthwaite, Texas. The bunkhouse is

the last run by the same Texas family who controlled Henry’s Turkey Service and the Atalissa, Ia., bunkhouse from which dozens of mentally retarded turkey plant workers were evacuated by the fire marshal in February.

Click here for the full archive of Des Moines Register stories about Henry’s Turkey Service and its facility in Iowa. The exploitation of workers there over many years is the subject of numerous current investigations. The horrific story had political fallout as well. Iowa Senate Republicans rejected Gene Gessow’s nomination to head the Department of Human Services, saying that as acting head of the department, Gessow “failed to be forthright about the Atalissa bunkhouse situation during important legislative oversight committee hearings.”

I’ve highlighted a few parts of Kauffman’s latest report after the jump, but I encourage you to click over and read the whole piece. Then ask yourself why any companies are allowed to pay the mentally disabled less than minimum wage. If a person is competent to do work a corporation needs done, that person deserves the same pay a person with no disabilities would receive.

Continue Reading...

Harkin working on Employee Free Choice Act compromise

I saw on Talking Points memo’s DC Wire that Senator Tom Harkin is sounding out Republican colleagues on a potential compromise for the Employee Free Choice Act, according to Roll Call. The Republican leadership will certainly try to filibuster this bill, and Democrats do not currently have 60 votes in favor. Some weaselly Democrats who voted for the EFCA in 2007 (knowing President Bush would veto it) are hedging now. In addition, Republican Senator Arlen Specter, who has supported the EFCA in the past, has flipped on the issue in light of a primary challenge from the right.

CEOs from three companies (Costco, Whole Foods and Starbucks) proposed a compromise on the EFCA recently. Harkin and other leading Democrats are not willing to accept that proposal for various reasons. For one thing, it would not include binding arbitration.

Earlier this month, Harkin had an excellent response to Republican critics who say we can’t afford to help labor unions now:

“In 1935, we passed the Wagner Act that promoted unionization and allowed unions to flourish, and at the time we were at around 20 percent unemployment. So tell me again why we can’t do this in a recession?” said  Sen. Tom Harkin (D-Iowa), invoking the pro-labor changes of the New Deal. “This is the time to do it. This is exactly the time we should be insisting on a fairer playing field for people to organize themselves.”

The Center for American Progress Action Fund created this outstanding web page supporting the Employee Free Choice Act. You’ll find many useful resources there, including a basic overview of what the EFCA would and would not do and an interactive map showing why unions are good for workers and the economy.

I clicked on Iowa and learned, “Union workers in Iowa make 8.40 percent ($1.48 per hour) more than non-union workers, on average.” (Click here and scroll down the page to see how the Center for Economic Policy Research calculated those figures.) Higher wages are not only good for individual families, they boost the economy as a whole consumer spending drives so much economic activity.

I am pessimistic about the prospects for passing the EFCA this year, but I give Harkin credit for trying to find a compromise that would still make it significantly easier for workers to form unions.

Continue Reading...

House votes down prevailing wage bill: now what?

The “prevailing wage” bill fiasco finally ended on Monday:

In what officials called the longest vote in Iowa Statehouse history, House Speaker Pat Murphy at 1:09 p.m. today closed the voting machine on the prevailing wage bill after 2 days, 19 hours and 14 minutes, declaring the bill had lost.

The vote was 50-48, one vote short of passage. But then House Majority Leader Kevin McCarthy, D-Des Moines, switched his vote to “no” — a procedural move that will allow him to bring the bill up for reconsideration later this session. So the final vote stood at 49-49.

After the jump I consider the two eternal political questions: “What is to be done?” and “Who is to blame?”

Continue Reading...
View More...