Excuse me, Mr. Donohue, WHO is “Taking from the Young”?!!

grandfather

grandfatherNo.  Just…no.

As a parent, I am absolutely revolted by Tom Donohue’s apparent attempt to incite a political war between the generations.

Yes, I understand that as America’s top business lobbyist, he would prefer the federal government to cut spending on Social Security and Medicare.

And yes, if the federal government spends less money taking care of our senior citizens, there will be more money available for corporate handouts.

But from my own perspective, the federal government already spends enough money on corporate handouts.  The average American family is now paying $6,000 a year in subsidies to big business.

Yet, based on yesterday’s speech, it looks to me like Mr. Donohue is willing to pit children against their grandparents, in order to get even more.

wealth share 1983-2010Mr. Donohue: it’s not our senior citizens who are “taking” wealth away from the next generation.

Look at what’s happened to the distribution of wealth since Ronald Reagan was President. 

Sixty percent of households LOST wealth… while those at the top of the economic ladder gained massively.

Look at what’s happened to annual income since Ronald Reagan was President.

income gains 1986-2008All the growth went to the richest 10%, while incomes for the bottom 90% declined.

The pattern holds true even during the current economic “recovery”.  According to economist Emmanuel Saez, “The top 1% captured 95% of the income gains.”

So yes, Mr. Donohue, it looks like this next generation will end up with a lot less than their grandparents had.

But no, Mr. Donohue.  It’s not our senior citizens who are “taking” that wealth away.

And you’re not going to start an inter-generational political war, to distract us from what’s really going on.

The Courts could destroy even MORE of our rights while we wait for Congress to fix Taft-Hartly

1947 CIO rally at Madison Square Garden
1947 CIO rally at Madison Square Garden

1947 Rally at Madison Square Garden

As I promised in yesterday’s post, here are a few examples of how things are getting worse, the longer we wait for Congress to fix (or repeal) the Taft-Hartley Act.

More states have passed so-called “Right to Work” laws. Nevermind what they’re called, RTW laws restrict employers’ rights: they prohibit employers from voluntarily agreeing to “agency fee” clauses in their union contracts. Last year, Indiana and Michigan joined the list of states that restrict employers’ rights; and the American Legislative Exchange Council (ALEC) is clearly still trying to spread their “model legislation” nationwide.

The Supreme Court will soon decide two cases that could further limit employers’ rights in their dealings with employee unions. Read the New York Times article here.

  • The first case will decide whether employers have the right to agree to remain neutral during a union organizing drive. (Shouldn’t employers be able to allow their employees to make their own decisions about union representation? In many worksites, unions and employers work cooperatively because they share the same goals. Why should federal law require the employer-union relationship to be adversarial, rather than cooperative?)
  • The second case attempts to impose “Right to Work” on the whole country through a court decision — rather than leaving it up to each state to decide for itself whether to limit employers’ rights.  (What happened to that old Tenth Amendment/states’ rights principle?)
  • The second case also challenges whether a state government has the right to allow union representation of home-care workers who are paid by Medicaid.  (Again: are we about to see the federal court system restrict a state government’s exercise of reserved powers?)

Taft-HartleyAnd then there’s Boeing. Just my personal opinion, but… it sure seems to me like Boeing is setting up another chance to litigate all those legal theories it came up with in 2011, back before the Machinists asked the NLRB to drop its complaint about Dreamliner production. The basic question at issue: whether a company has the right to relocate jobs in retaliation for (legally protected) union activity. That 2011 complaint was part of “a very long line of cases that the NLRB has been pressing since the 1940s, when employers began moving work from unionized workplaces in the industrial Northeast to non-unionized workplaces in the Southeast and later the Southwest.” Just think what the impact on unions could be, if Boeing persuades the courts to agree with its legal theories. (Read more NHLN coverage of Boeing here.)

Why am I so concerned about these Court cases (and potential court cases) ?  Well… because the Supreme Court is now headed up by Bush appointee John Roberts.  Back in 2005, he was described as one of the “three possible nominees that big business would cheer” — in part because they thought Roberts might “influence the court to decide more cases deemed critical to business.”  Quoting one observer of that nomination process: “Roberts has spent his career as a mind-for-hire on behalf of the rightwing Republican agenda.”  Quoting another: “if Roberts feels free to overturn precedent… Of particular concern is a return to the Lochner era, a time when free-market capitalists read their ideology into the Constitution by striking down statutes aimed at protecting workers’ health and safety.”

I guess we’re about to find out whether those observers were as accurate in their predictions as President Harry Truman was, in his.

(If you didn’t read yesterday’s post, to read Truman’s prognostications from 1947, click here.)

————

Sen. Edward M.KennedyAnd, in a sad epitaph for Sen. Ted Kennedy… as far as I can tell, no-one has re-filed the Employee Free Choice Act since he died.

(Read yesterday’s post to learn more about the economic and social problems caused by Taft-Hartley, and one possible reason why Sen. Kennedy filed EFCA to fix them.)

Still Waiting for Congress to fix Taft-Hartley By Passing EFCA

Photo from Kheel Center, Cornell University via Flikr/Creative Commons

Sen. Edward M. Kennedy

It has been a decade since Sen. Ted Kennedy first filed the Employee Free Choice Act.

He filed the bill on Friday, November 21, 2003 – almost exactly 40 years after the death of President John F. Kennedy.

A coincidence? Not likely. Here’s the back story:

The Employee Free Choice Act would restore union organizing rights that were taken away by the 1947 Taft-Hartley Act. John F. Kennedy was a member of the Congress that passed Taft-Hartley.

“The first thing I did in Congress was to become the junior Democrat on the labor committee. At the time we were considering the Taft-Hartley Bill. I was against it, and one day in Harrisburg, Pennsylvania, I debated the bill with a junior Republican on that committee who was for it . . . his name was Richard Nixon.” [from a 1960 recording of President Kennedy reflecting on his career]

Both Kennedy and Nixon believed that Nixon won that debate. And just weeks later, Congress passed the Taft-Hartley Act, overriding a veto by President Harry Truman.

President Truman was eerily accurate in his predictions of what the Taft-Hartley Act would do.

Photo from Kheel Center, Cornell University via Flikr/Creative Commons

Photo from Kheel Center, Cornell University via Flikr/Creative Commons

From his radio address to the country:

“The Taft-Hartley bill is a shocking piece of legislation. It is unfair to the working people of this country. It clearly abuses the right, which millions of our citizens now enjoy, to join together and bargain with their employers for fair wages and fair working conditions. …”

“I fear that this type of legislation would cause the people of our country to divide into opposing groups. If conflict is created, as this bill would create it—if the seeds of discord are sown, as this bill would sow them—our unity will suffer and our strength will be impaired.”

From his veto message to Congress:

“When one penetrates the complex, interwoven provisions of this omnibus bill, and understands the real meaning of its various parts, the result is startling. … the National Labor Relations Act would be converted from an instrument with the major purpose of protecting the right of workers to organize and bargain collectively into a maze of pitfalls and complex procedures. … The bill would deprive workers of vital protection which they now have under the law…. This bill is perhaps the most serious economic and social legislation of the past decade. Its effects–for good or ill–would be felt for decades to come.”

Fast-forward through those decades, and read the testimony of former National Relations Labor Board Hearing Officer Nancy Schiffer:

“At some point in my career… I could no longer tell workers that the [National Labor Relations] Act protects their right to form a union. … Over the years, the law has been perverted. It now acts as a sword which is used by employers to frustrate employee freedom of choice and deny them their right to collective bargaining. When workers want to form a union to bargain with their employer, the NLRB election process, which was originally established as their means to this end, now provides a virtually insurmountable series of practical, procedural, and legal obstacles.”

Read this report by researchers at the University of Illinois-Chicago:

“Each year in the United States, more than 23,000 workers are fired or penalized for union activity. Aided by a weak labor law system that fails to protect workers’ rights, employers manipulate the current process of establishing union representation in a manner that undemocratically gives them the power to significantly influence the outcome of union representation elections. … Union membership in the United States is not declining because workers no longer want or need unions. Instead, falling union density is directly related to employers’ near universal and systematic use of legal and illegal tactics to stymie workers’ union organizing.”

Read the report by Cornell University Professor Kate Bronfenbrenner:

“Our findings suggest that the aspirations for representation are being thwarted by a coercive and punitive climate for organizing that goes unrestrained due to a fundamentally flawed regulatory regime … many of the employer tactics that create a punitive and coercive atmosphere are, in fact, legal. Unless serious labor law reform with real penalties is enacted, only a fraction of the workers who seek representation under the National Labor Relations Act will be successful. If recent trends continue, then there will no longer be a functioning legal mechanism to effectively protect the right of private-sector workers to organize and collectively bargain.”

Now, go back and consider President Truman’s most serious prediction from 66 years ago: that the Taft-Hartley Act “would cause the people of our country to divide into opposing groups. If conflict is created, as this bill would create it—if the seeds of discord are sown, as this bill would sow them—our unity will suffer and our strength will be impaired.”

President John F. Kennedy

Think about our national politics.  Isn’t our country divided enough? Isn’t it time to reverse the process started by the Taft-Hartley Act?

It’s been a decade since Sen. Kennedy first filed the Employee Free Choice Act.  Next week, we will mark a half-century since President John F. Kennedy died.

 

Isn’t it time to yank the roots of discord, start ending the conflict, and heal the division that was created by the Taft-Hartley Act?

————

To my long-time readers: apologies if this sounds familiar.  Once again, I have just updated last year’s post to reflect the passage of time; there was no reason to write a new post, because things haven’t changed.  So instead of trying to reword things I’ve already said, I’m just going to start using a new hashtag: #dejavu. (You can see all my repeats in one place!)

Actually, it’s not exactly true that “things haven’t changed.”  In this case they are changing — they’re getting worse.  But more on that, tomorrow.

Why the economy doesn’t work for the 99%

EGTRRA signing

Today’s New York Times has a really good picture of what’s happened to America’s economy over the past 50 years.

Please take a few minutes to look at it, and pay particular attention to what’s happened since the Bush tax cuts started going into effect in 2001.

  • Corporate profits are at their highest level ever.  After-tax corporate profits were 5% when the Bush tax cuts started taking effect — now they’re at 9.7%.
  • Wages are at their lowest level level ever.  When the Bush tax cuts started taking effect, 46.7% of the gross domestic product was paid to workers as wages — now it’s 42.6%.
  • Corporate taxes are at almost-record lows.  Corporations paid 30% of their profits as taxes, when the Bush tax cuts started taking effect — now they pay 21.6%.
  • Personal taxes have also dropped.  Taking all taxpayers together (the 1% as well as the rest of us), individuals paid 17.8% of their incomes as taxes when the Bush tax cuts started taking effect — now, it’s 14.1%.

Remember, the Bush tax cuts were supposed to be temporary.  They were supposed to “stimulate the economy” and then expire in 2011.

Instead, the Republicans in Congress have used one fiscal crisis after another to keep most of those tax cuts in place.

Top Tax Rates 1952-2008And now they’re talking as if those Bush-era tax rates are a ceiling, not a floor.  (Read “Corporate Tax Cuts are almost twice the Sequester cuts” here.  Read about the $161 billion annual cost of the dividend and capital gains tax cuts here.)

Republicans in Congress keep agitating about the federal debt — but they’re not willing to raise revenues by returning to historical tax levels.  No, the GOP keeps insisting that the only way to address the debt is by cutting “entitlements”.

Let’s use real words, here, so everyone knows what the choice comes down to.  Translated from GOP-speak, “entitlements” are Social Security, Medicare and Medicaid.  (Remember, you have paid into the Social Security and Medicare trust funds with every paycheck, for as long as you’ve been working.)

So here’s the choice:

  1. Congress can continue to let the federal debt grow.
  2. Congress can return taxes to historical levels.
  3. Congress can cut Social Security, Medicare and Medicaid.

Congress is going to be making this choice over the next two and a half months.  The current federal budget expires on September 30th — about the same time that the federal government will hit the debt limit (again).

Go back and look at those New York Times “what happened to the economy” charts again.

Don’t you think it’s time to finally end the Bush tax cuts?

 

Detroit: latest battleground in the war on the Middle Class

whose_rights

whose_rightsThere are times when I would really prefer to be wrong… and Wednesday was one of them.

Yesterday afternoon, the federal judge overseeing Detroit’s bankruptcy proceedings suspended all other legal actions by public workers who are trying to protect their constitutional rights.  And it is very unlikely that workers’ rights will be considered during the bankruptcy proceedings.

What good are constitutional rights, if workers can’t get them enforced in court?  It’s the same basic dilemma that we’ve been looking at, with all the controversy about members of the National Labor Relations Board.  If the NLRB doesn’t have enough members for a quorum – and so they can’t enforce the National Labor Relations Act – then do workers really have the rights supposedly guaranteed to them?

Read my post “Who has rights when Detroit goes to court?” here.

The next step is a procedural hearing on August 2nd, when the judge will decide whether to go ahead and appoint a mediator in the case.

—–

Ever read Sun Tzu’s The Art of War?

Back in the 1990s, the book was a must-read for MBA candidates learning a new, bloodthirsty style of management.  When Newt Gingrich was taking over as Speaker of the House in 1994, he included it on his “reading list” for incoming Republicans.  It’s also a favorite of Republican strategist and Fox News chief Roger Ailes.

One of its principal themes is: Know your opponent.  So let’s look at Detroit from that perspective.

Michigan Governor Rick Snyder:

Bankruptcy Counsel, the law firm of Jones Day:

Yeah, these are the folks that our union brothers and sisters are up against, out there in Detroit.

And it doesn’t look like they are going to be able to rely on the court system to protect their legal rights.

—–

Sun Tzu gets the final word, here: “There is no instance of a country having benefited from prolonged warfare.”

It’s time for the right-wing’s war on the Middle Class to stop.

—–

Read my Friday blog post about Detroit here.

Read Monday’s post here.

Read Tuesday’s post here.

Read yesterday’s post here.

Think you’ve got retirement benefits? Think again.

Detroit has gone bankrupt

Really, truly: what is happening in Detroit is more important to you than the Zimmerman jury sequestration details.  Or the Rolling Stone cover.  Or any of the other things that have been distracting us lately.

Detroit has gone bankruptWhat’s going on in Detroit could steal our families’ financial security.  It could radically alter what our lives are going to be like, here in New Hampshire, when we can’t work any longer.

Here’s the short version:  four months ago, the Republican Governor of Michigan, Rick Snyder, named bankruptcy lawyer Kevyn Orr to be “emergency financial manager” of the City of Detroit.

Yesterday, Attorney Orr filed a petition in federal court to have the city declared bankrupt.

What’s he looking for?  High on his list: debt relief from the city’s obligations to its current and future retirees.

This is where you need to start watching, really closely.  Depending on which accounting method is used, Detroit’s pension systems are either 91.4% funded or 69.3% funded.

The New Hampshire Retirement System “presently has a funded ratio of 56.1 percent.”

Yes, Detroit’s pension funds are in a lot better financial condition than ours is.  Yet Attorney Orr says their unfunded liability is too large, and he has asked a federal court to give the public employer “relief” from its retirement obligations.

Sound familiar? Down in West Virginia, thousands of people have been protesting a bankruptcy judge’s decision to let Patriot Coal off the hook for its retirees’ benefits.

And in Oklahoma, American Airlines retirees are waiting to see if a bankruptcy judge will let their employer renege on long-promised benefits.

Yes, using bankruptcy to evade pension obligations has been a problem in the private sector for decades now.  But just last month, it became a problem for public sector employees, too.

During bankruptcy proceedings for Stockton, California, a federal judge ruled that the city could use bankruptcy to relieve itself of the obligation to provide retiree health benefits.  “The liability for retiree medical benefits is estimated by the parties to be in the hundreds of millions.”  Stockton retirees are having to settle for a single lump sum payment of $5.1 million.  That’s barely pennies on the dollar, for a debt owed to people who spent their careers in public service.

And now Attorney Orr is trying to take Detroit down that same path toward “debt relief”.

Think it couldn’t happen here?  Think you can rely on the 1984 constitutional amendment, Article 36-a, that was meant to protect New Hampshire public workers from raids on our retirement benefits?

Probably City of Detroit workers thought their 1963 constitutional amendment would protect their retirement benefits, too.

What’s really going on here?

During the 2007-2008 Wall Street meltdown, public pension systems across America lost more than a trillion dollars in value.   Yes, that’s “trillion” – with a “T”.

And now that our pensions are a trillion dollars underfunded, they’re being attacked as “unaffordable”.  (Aren’t you glad Bill O’Brien isn’t still Speaker of the NH House?)

Any guesses on how many other Republican governors and mayors will soon be trying to “restructure” their way out of obligations to public sector retirees?

————

Back when I worked for Republican politicians, they truly believed in the sanctity of contracts (such as employers’ contractual obligation to pay long-promised retirement benefits).

In fact, when they talked about “core functions” of government, the enforcement of contracts was right up there at the top of the list.  After all, how can the economy function if parties aren’t required to live up to their contractual obligations?

Perverting the bankruptcy process to obtain “relief” from contractual obligations… well, that wasn’t anywhere in the playbook, back when I worked for Republicans.

————

Can’t help but notice…

The very same day that 30,000 Detroit public workers learned their financial future was on the chopping block, thanks to losses from the 2007-2008 Great Recession…

…over there on Wall Street, the Dow hit another record high.

America’s economy: socialized risks, privatized profits?!!?

Edgar Degas, The Orchestra at the Opera [Public domain], via Wikimedia Commons

Edgar Degas - The Orchestra at the Opera - Google Art Project 2Orchestrated?!!? Why would anybody think the public messaging was orchestrated?

Just because yesterday – Sunday – a group of hedge fund investors sued the US Treasury over dividends they want to get from mortgage-guarantee firms Fannie Mae and Freddie Mac. (And of course, since it was Sunday, there were no Treasury representatives immediately available to respond to the lawsuit. Which means the public is hearing only the investors’ side of the story, in all those thousands of stories about the lawsuit now running nationwide.)

And in today’s Boston Globe, there is a column by former NH Senator John E. Sununu arguing that Fannie Mae and Freddie Mac should be “retooled” – before the companies have the opportunity to “pay back the funds taxpayers sank into them” at the beginning of the Great Recession. (In case you’ve forgotten, we the taxpayers spent about $188 billion to bailout the two mortgage giants.)

The plan Sununu is endorsing wouldn’t actually eliminate government guarantees for the “retooled” and “reformed” new “Federal Mortgage Insurance Corporation”. No, no… the corporation would still have taxpayers as a financial backstop. But somehow, through the magic of federal legislation, “private financiers should have incentives to manage risk more effectively than in the past.”

Sunday court filings? Monday newspaper columns? Why on earth would anybody think there might possibly be a deliberate messaging campaign here?

Here’s MY short version of what’s at stake:

In the past several months, hedge funds have been quietly buying up shares in Fannie and Freddie. Those shares used to be basically worthless…. but their value is rising even as I type this post.

And for the past couple of months, hedge fund lobbyists have been quietly meeting with Congressional leaders to push “reform” efforts similar to the plan Sununu endorsed in the Globe today. Under current law, “Treasury holds $188.5 billion in senior preferred shares in the two companies, representing the amount of aid they have drawn from taxpayers to stay afloat. [As of April,] The companies have sent back $65.2 billion in dividends, which count as a return on the government’s investment and not as a repayment. Treasury also holds warrants to purchase nearly 80 percent of the companies’ outstanding common stock. “ But now that Fannie and Freddie are turning a profit, hedge fund lobbyists want to return the companies to private ownership.

That’s what’s at stake: billions of dollars in profits.

In all the stories I’ve read today, nobody is suggesting the private sector should assume all the risk inherent in the mortgage market. No, it seems they’re happy to have the federal government – we, the taxpayers – as the ultimate guarantor. In other words, the risk is “socialized”.

They just want the profits to be privatized.

And the way they phrase it, it all sounds so reasonable… if you’re too hot and tired to think twice about it… or if you’re relaxed and in a good mood from a July 4th vacation. And besides, the story broke on Sunday, with nobody around to give the other side.

As a professional communicator, myself, I gotta admire their timing and technique.

But as a member of the 99%, I am appalled at their insistence that profits should belong to hedge fund investors, rather than to the taxpayers who will continue to bear the investment risk.

—–

Read “How do we get an economy that works for the 99%?” here.

Quote of the week:

“We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.” – Supreme Court Justice Louis Brandeis

 

America’s “Race to the Bottom”: Boeing is still outsourcing

Boeing Dreamliner

Boeing DreamlinerYesterday, the Boeing Company announced it would “create engineering centers for future work in South Carolina and possibly in Kiev, Ukraine.”

The perspective from Seattle, Washington:

The engineering union here — the Society of Professional Engineering Employees in Aerospace (SPEEA), which represents nearly 26,400 engineers and technical staff — has long decried Boeing’s outsourcing of engineering work to its design center in Moscow.

Boeing internal documents obtained by The Seattle Times in 2004 after the Moscow center was set up show the company could employ high-quality Russian engineers there at ‘approximately 1/3 to 1/5 of the U.S. cost.’

Remember, this is the Boeing Company – manufacturer of the problem-plagued Dreamliner 787. Read “Boeing Learns the Hard Way that Outsourcing Hurts in the Long Run” here.

Most of us would think that “lessons learned the hard way” would maybe change a corporation’s modus operandi.

Most of us would think that maintaining – or restoring? – a reputation for quality workmanship would be particularly important to an airplane manufacturer.

But right now, the American economy is caught in a race to the bottom. These days, CEOs aren’t interested in long-term corporate reputations. They’re interested in profits. And Boeing’s executives have been producing good profits – despite the Dreamliner mess, and despite lower sales.

How? They’ve been so very, very proficient at “controlling costs” – costs such as engineering and skilled manufacturing labor. Read “Boeing profit beats estimates despite 787 problems” here.

And Boeing has rewarded its executives handsomely for their ability to “control costs”. Last year, “key executive” compensation was up almost 55%. And the guy at the top? CEO Jim McNerney received almost $27.5 million. One person. One year. Almost $27.5 million.

(And that doesn’t even include what McNerney receives in Boeing corporate dividends. According to SEC filings, McNerney owns a few hundred thousand shares of Boeing stock, mostly received as part of his executive compensation. That means McNerney receives almost another quarter-million dollars, every time Boeing issues quarterly dividends. And guess what? Those dividends are taxed at a much lower rate than ordinary wages and salaries.)

So yes, America’s economy is still racing toward the bottom. Boeing is hiring engineers at 20 cents on the dollar — and planning even more outsourcing.

How much lower can we go?

————-

More on McNerney’s dividends:

Not that long ago, dividends were taxed as ordinary income. It didn’t matter whether someone’s income came from wages or stock holdings, it was still taxed the same.

One of the many “Bush tax cuts” changed that – and now, stock dividends are taxed at roughly half the rate as CEOs’ salaries.

This morning, I finally added it all up. According to Congress’ Joint Committee on Taxation, over the past decade the “reduced rates of tax on dividends and long-term capital gains” have cost the federal government more than a trillion dollars in revenue ($1,020 billion, since FY2004).

That means almost 6% of the country’s total federal debt is directly attributable to this bizarre tax preference for unearned income.

Now that the stock market is booming, the impact is even greater: expect another $1.3 trillion loss of federal revenue over the next 10 years. And according to the Congressional Budget Office, the top 1% of taxpayers receive almost 70% of the benefit of this tax preference for unearned income.

The rest of us in the 99% get…?

 

What a choice! One year of investment tax cuts equals 10 years of Social Security cuts?

Choices, by Benimoto via Flikr

Choices to surviveBudgets are all about choosing priorities.  And here’s one choice: chained CPI?  Or eliminate the tax break for investment income?

When I looked at the numbers this morning, I was stunned.

Chained CPI is a way of recalculating – and permanently lowering – everyone’s Social Security benefits.  It has been a top Republican priority for years.  The White House Budget Director estimates that changing to chained CPI would save the federal government $150 billion over the next decade.

And how much does the federal government spend on tax breaks on investment income?  According to Congress’ Joint Committee on Taxation, tax breaks on investment income will cost $161 billion this fiscal year alone.

Go back and read that again.

Tax breaks on investment income cost the federal government more – in just one year – than chained CPI would save over an entire decade.

Budgets are all about choices.  For many American families, the choices are between food and heat, medicine or mortgage?  For Congress, as it debates this budget, the choices are about who pays – and who benefits.

I’m still stunned.  One year of treating investment income as if it was wage income would pay for ten years of the Republicans’ proposed cuts to Social Security benefits.

I’m still at a loss for words.  It is morally wrong, that this choice is even being considered.

 

How do we get an economy that works for the 99%?

Nurses_OWS

Day 20 Occupy Wall Street October 5 2011 Shankbone 3It’s official: Wall Street has recovered from the recession. Yesterday,

The Dow Jones Industrial Average rose to its highest level ever, erasing losses from the financial crisis after a four-year rally fueled by the fastest profit growth since the 1990s and monetary stimulus from the Federal Reserve. About $10 trillion has been restored to U.S. equities as retailers, banks and manufacturers led the recovery from the worst bear market since the 1930s.

Meanwhile, back in the real world, America’s middle class is still losing ground.

In the wake of the Great Recession, millions of middle-class people are being pinched by stagnating incomes and the increased cost of living. America’s median household income has dropped by more than $4,000 since 2000…

The unemployment rate has been getting better – but for most American families, life is still getting worse.

One of the most disturbing trends of the recession is still very far from being reversed. America’s middle-class jobs have been decimated since 2007, replaced largely by low-wage jobs.

In other words, wages are still falling. From the San Francisco Federal Reserve Bank:

Many middle-class workers have lost their jobs and, if they have been able to secure new employment at all, find themselves earning far lower wages post-recession… on average over the next 25 years, these workers will earn 11% less [than they would have, if they hadn’t lost their jobs during the recession].

Back in Washington, DC, what are the politicians doing?

  1. House Republicans believe they’re “on the side of the angels” on defense spending. They are coalescing around a budget deal that would allow the Pentagon more flexibility to move money around (for instance, using savings that resulted from troop withdrawals to restore funding to military contractors).
  2. House Budget Committee Chairman Paul Ryan is working on next year’s budget. Should be interesting to read. The last time he proposed a budget, a whopping 62% of the budget cuts came from programs that help low-income people.
  3. And Ryan still plans to privatize Medicare. His only question: what should the cut-off age be? Should current Medicare benefits be guaranteed for people 55-and-older? 56-and-older? Even older than that? [The League of Women Voters analyzed Ryan’s proposal and calculated that the voucher system would pay only 32% of the cost of covered procedures, leaving patients to pay the other 68% of the cost. Read Time Magazine’s piece on medical costs here.]

Obviously, last November’s election didn’t change the dynamics in Washington.

What is it going to take, to do that?