U.S. is the only advanced economy without paid vacation law

WASHINGTON,DC: The United States is the only advanced economy that does not guarantee its workers any paid vacation time, according to a report by the Center for Economic and Policy Research. As a result, 1 in 4 private-sector workers in the U.S. do not receive any paid vacation or paid holidays.

The report, No-Vacation Nation, by Rebecca Ray and John Schmitt, finds that European workers are legally guaranteed at least 20 paid vacation days per year, with 25 and even 30 or more days common in some countries. The gap between paid time off in the United States and the rest of the world is even larger when legal holidays are included. The United States does not guarantee any paid holidays, but most rich countries provide between 5 and 13 per year, in addition to paid vacation days.

“The United States is the only advanced economy in the world that does not guarantee its workers paid vacation days and paid holidays,” said John Schmitt, senior economist and co-author of the report. “Relying on businesses to voluntarily provide paid leave just hasn’t worked. It’s a national embarrassment that 28 million Americans don’t get any paid vacation or paid holidays.”

The sum of the average paid vacation and paid holidays provided to U.S. workers in the private sector ― 15 in total ― would not meet even the minimum required by law in 19 other rich countries.

A review of international standards shows that the United States lags far behind the rest of the world's rich countries. The lack of paid vacation and paid holidays in the U.S. is particularly acute for lower-wage and part-time workers, and for employees of small businesses. The report finds:

Employees of small businesses in the U.S. are less likely to have any paid vacation (70 percent) than those in medium and large establishments (86 percent).

Lower-wage workers in the U.S. (those making less than $15 per hour) are even worse off. Only 69 percent have paid vacation, compared to 88 percent of higher-wage workers.

Part-time workers in the U.S., who are much more likely to be women, are far less likely to have paid vacations (36 percent) than are full-time workers (90 percent).
The authors also found that several foreign countries offer additional time off for younger and older workers, shift workers, and those engaged in community service such as jury duty or voting.

The report reviewed the most recently available data from a range of national and international sources on statutory requirements for paid vacations and paid holidays in 21 rich countries (16 European countries, Australia, Canada, Japan, New Zealand, and the United States).

http://www.cepr.net

Made In the U S A

Fiscal Year 2010 budget will restore funding for worker protection programs

SECRETARY OF LABOR HILDA SOLIS

From the AFL-CIO's NOW blog:

Labor Secretary Hilda Solis told two congressional committees this week that the Department of Labor’s fiscal year (FY) 2010 budget will restore capacity in our worker protection programs, which have languished for years.

Appearing in separate hearings before the Senate and House Appropriations committees’ Labor, Health and Human Services and Education subcommittees, Solis said the department’s budget—including a 10 percent increase for worker protection programs—will fund three priorities:

Renewed capacity of programs that protect workers’ safety and health, pay and benefits; new and innovative ways to promote economic recovery and the competitiveness of our nation’s workers; and carrying out programs in a way that is accountable and transparent to the public and our stakeholders.

Sen. Patty Murray (D-Wash.) said the budget will allow significant improvements in labor protections and workplace safety and health.

At the House hearing, Rep. Rosa DeLauro (D-Conn.) said during the past eight years, the department relied far too heavily on voluntary employer compliance programs for workplace safety and other worker protections.

Your budget makes it clear that your department is in competent hands.

Solis said the proposed funding for the Occupational Safety and Health Administration (OSHA) will restore OSHA’s capacity to enforce statutory protections, provide technical support, promulgate safety and health standards, and strengthen safety and health statistics.

The increased funding for worker protection programs, Solis said, will allow the department to hire an additional

130 safety and health inspectors (a 10 percent increase from FY 2009);
25 whistle-blower investigators (a 33 percent increase);
13 full-time employees to strengthen OSHA’s capacity to quickly respond to the sudden emergence of safety and health hazards, such as a pandemic influenza;
20 full-time employees to restore OSHA’s rule-making capabilities, allowing the agency to simultaneously address multiple complex longstanding and emerging regulatory issues.

Solis told the committees the budget request for the Mine Safety and Health Administration (MSHA)—including funds to hire 15 new inspectors for metal and nonmetal mines—will allow MSHA to ensure a 100 percent completion rate for all mandatory safety and health inspections; support MSHA’s enhanced enforcement initiatives, which target patterns of violation, flagrant violators, and scofflaws.

In March, a report from the Government Accountability office (GAO) found the Labor Department’s Wage and Hour Division under the Bush administration had a pattern of failing to investigate worker complaints of employer wage theft. The report followed up two earlier GAO investigations outlining the Wage and Hour Division’s failure to investigate worker complaints of employer wage violations.

Solis told the panels that the Wage and Hour Division’s budget includes a $35 million increase over the last Bush budget and allows the hiring of 288 more inspectors to help revive its customer service focus by supporting improved complaint intake and more in-depth complaint investigation processes. In FY 2010, the Wage and Hour Division will hire additional investigators to strengthen enforcement resources on behalf of vulnerable workers; verify future compliance of prior violators; and conduct high quality, responsive complaint investigations strategically, to increase protections for the greatest number of workers.

Rep. Shuler joins with Progressives for Immigration Reform to promote SAVE Act

CONGRESSMAN HEATH SHULER D-NC WORKING FOR REAL IMMIGRATION REFORM

The Washington Examiner reports:

Rep. Heath Shuler will soon reintroduce the SAVE Act (Secure America through Verification and Enforcement) within the next few weeks. The legislation is built around a three part plan to reduce illegal immigration. This includes: a strict emphasis on border security, the verification of an employee’s legal status, and increased enforcement of existing laws.

Shuler outlined his plan and discussed its prospects at a forum held near Capitol Hill Tuesday evening at the office of Progressive for Immigration Reform.
Shuler emphasized the importance of “interior enforcement” in his talk and said the E-Verify program could serve as a foundation for future efforts aimed at reducing the flow of illegal immigration. The electronic system would provide local officials with the ability to cross check federal databases and would essentially work like a Google search, he explained.

“This is not about discrimination because E-verify is activated after someone has been hired,” Shuler said. “This helps to ensure that local officials can identify who they arrest. Interior enforcement is crucial.”

Shuler also said there were not enough immigration judges available to hear cases and this complicates the interior enforcement of federal law. But he sees enough common ground among members in both parties to rally around key provisions in the SAVE Act that would help change the current dynamic.

Up until now the cause of tighter border security and interior enforcement has been identified with conservative Republicans but Leah Durant, executive director of Progressives for Immigration Reform, believes there is an opportunity to broaden this base of support.

“We started this organization because we wanted to bring in more liberals on the side of tighter enforcement,” Durant said. “There is a lot of concern about the impact mass immigration will have on the environment. In fact, there is a natural marriage here between immigration reform and environmental preservation. So we can have people across the political spectrum.”

http://www.washingtonexaminer.com/opinion/blogs/Examiner-Opinion-Zone/Rep-Shuler-Joins-with-Progressives-for-Immigration-Reform-to-Push-SAVE-Act-44135177.html

ADA says real unemployment at 15.8%

Washington, DC - The real unemployment rate released on Friday by the Bureau of Labor Statistics is 15.8%, nearly 7 points higher than the rate officially reported according to Americans for Democratic Action (ADA).

The real rate includes marginally attached workers which the BLS reports “are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not looking currently for a job. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule.”

Since April 2008, 6 million people have lost their job. ADA’s Real Rate of Unemployment represents a staggering 23 million people who are unemployed or underemployed.

The increase of another 563,000 jobless claims for April 2009 was the smallest rise in 6 months, providing some evidence that government stimulus is working but underscoring the urgent need to put more government dollars to work motivating the private sector to begin hiring laid-off workers.

ADA National Director, Amy Isaacs, said: “While the Republican Party of No is looking backwards, rather than coming up with new ideas to help America’s working families, President Obama and Democrats in Congress are moving forward with a bold agenda. There is still much to do as record lay-offs continue and economic challenges abound, but we share the optimism of leading economists who believe the worst is behind us.”

http://www.adaction.org

Political Courage

Facing South: Are the Blue Dogs getting a bad rap ?

In a post at the Institute for Southern Studies blog Facing South, Chris Kromm asks if Blue Dog Democrats are facing unfair criticism from the netroots. As Kromm notes, most of the Democrats who vote more conservative than their districts (especially on economic issues) are not members of the Blue Dog Coalition.

Kromm writes:

The Blue Dog Democratic Coalition is one of the favorite punching bags of the progressive blogosphere. From DailyKos to OpenLeft, the Blue Dogs -- a group of 51 "moderate and conservative" House Democrats -- are routinely held up as a symbol of all that's wrong with the Democratic Party.

A piece yesterday in Firedoglake is typical of the anti-Blue Dog genre, in which they are savaged for being hypocritcal about government spending, opposed to hate crime laws and being the descendants of racist Dixiecrats (although the majority of Blue Dogs aren't in the South). http://firedoglake.com/2009/05/07/the-other-white-meat-blue-dogs-hate-pork-unless-its-theirs/

Defenders of the Blue Dogs respond by saying that these Democrats come from "hard districts," and they can't take progressive stands because they'll get voted out of office by their conservative constituents.

Put aside for the moment the unpleasant implication that Blue Dog votes are devoid of moral conviction and based purely on political calculation. Even on its own terms, is the idea that Blue Dogs come from uniquely conservative "hard districts" even true?

An analysis by the Swing State Project this week might give the Blue Dogs some backup.

In a widely-circulated post, blogger Crisitunity ranked members of the 110th Congress by their votes compared to their districts' Partisan Voting Index, a measure first developed by political analyst Charlie Cook in 1997. The idea is to find out if a Representative's voting record in 2008 was more or less "Democratic" than his district. http://www.swingstateproject.com/diary/4578/pvivote-index-for-2008

"Under-performing" Democrats are those that consistently vote more conservative than they could likely get away with given their district's Democratic leanings. "Over-performing" Democrats are those that somehow manage to vote more Democratic-friendly than their constituency.

So how do the Blue Dogs stack up? According to the Swing State Project's analysis:

* Only three of the top 20 "under-performing" Democrats in 2008 were in the Blue Dog Coalition: Reps. Scott (GA-13), Harman (CA-36) and Cooper (TN-5).

* By contrast, six of the Blue Dogs were among the 20 most "over-performing" Democrats: Reps. Taylor (MS-4), Matheson (UT-2), Pomeroy (ND-AL), Lampson (TX-22), Herseth (SD-AL) and Chandler (KY-6).

An analysis of Cook's own PVI rankings for Congressional districts shuffles some of the names but arrives at the same conclusion: there are more Blue Dogs topping the list of Democratic "over-performers" than "under-performers." http://en.wikipedia.org/wiki/Cook_Partisan_Voting_Index

What does it all mean?

One take is that, in key cases, the Blue Dogs are right about the makeup of their districts and the amount of political room they have to maneuver.

Furthermore, Blue Dogs are hardly unique -- in fact, most of the top Democrats who are voting more conservative than their constituents aren't Blue Dogs.

But then there are those representatives who cement the case that Blue Dogs can be out of touch with their districts. Exhibit A is Rep. David Scott whose conservative, business-friendly votes are a mismatch for his diverse and strongly Democratic district in the Atlanta suburbs. Rep. Jane Harman is clearly another.

An important note: The PVI is a limited tool. It measures the political lean of a district by presidential votes -- useful shorthand, but one that ignores complicated questions like the way a presidential election played out in a particular district.

And it clearly doesn't capture the breadth of political views among constituents -- for example, what about Southern populists who may vacillate on social issues but be progressive on economic ones?

The Blue Dogs also have to answer another question: Many Democrats, either due to conviction or opportunism, vote more conservative than their districts. But why have Blue Dogs taken the extra step of organizing/joining a political bloc that often defines itself by its opposition to the broader Democratic agenda -- as with the stimulus bill and Obama's budget?

In other words, the question for Democrats isn't necessarily whether the Blue Dogs are too conservative, but why they've organized in a way that frequently undermines the Democratic brand.

http://www.southernstudies.org/2009/05/do-blue-dog-democrats-get-a-bad-rap.html

Dissent: We Need a Permanent Solution for Our Banks

Writing in Dissent Magazine [www.dissentmagazine.org], Greg Smithsimon makes a strong argument for bank nationalization. As Smithsimon points out in the article, publicly owned does not have to mean government owned.

Smithsimon writes:

The Obama administration has gone to great lengths to insist that if nationalization of banks is necessary, it will only be temporary—as if the general public thinks the U.S. government was planning to permanently nationalize banks.

Yet that’s exactly what should be done. Time and time again, our experiences in the United States and in the global economy have taught us that banks are like weapons of mass destruction: they can cause so much damage to our society that they have to be guarded by stable states rather than rogue private interests who will exploit them for their own dangerous ends. On a regular basis privately held banks decimate our economy and those of an inexhaustible list of other countries. The inevitability of privately owned banks wriggling free of regulation and engaging in dangerous speculative activity for private gain is by now clear. The cost is unacceptably high.

The Realities and Benefits of Nationalized Banks
Nationalizing the banks can bring us two different sets of improvements to our current situation: As retail banks, they will provide consumers with healthy, stable replacements for the bankrupt zombie banks now paralyzing the economy. As democratized versions of the Federal Reserve Bank, they can oversee financial reform and fiscal policy that serve the needs of real Americans.

If we nationalize retail banks, they can provide checking and savings accounts, make loans for homes and small businesses, and do so without the speculative madness that private banks recently exhibited. Thus state banks would restore liquidity to the credit markets, confidence in the banking system, and sanity to lending practices.

What would this look like? Dozens of countries already have such state-owned banks. The state-owned CGD is Portugal’s largest bank. Most such countries have “post banks,” including Greece, New Zealand, and Ireland. Typically, they are state-owned banks in which customers make deposits and withdrawals at the counter of their local post office. Israel just created a separate postal bank company in 2006. Great Britain’s National Savings and Investments is state owned, and just last month a British survey showed 75 percent of the public supports creation of a new, publicly owned post bank as an alternative to private banks.

This would not be a new idea in the United States, which had a post bank until 1967. (The attraction of the bank originally was that only its deposits were insured by the full faith and credit of the United States. The FDIC eventually extended that benefit to private banks as well, but the recent banking debacles raise the question of whether such public guarantees should be made without the kind of oversight offered by public control.) Thus one promising model is for the United States to convert failed private banks into a system of publicly owned banks that could use depositor savings to make responsible home and business loans.

Beyond creating stable retail banks, public banks are also useful for macro-level policy purposes: state-run central banks set interest rates and implement de facto regulatory safeguards, and the more that macro-level banks are in the hands of the public instead of bankers on loan from Citibank, the more they can operate in the public interest rather than in the interest of speculative investment banks.

The Federal Reserve is already a state-run, not-for-profit, macro-level bank. But while it’s a government agency, its board of directors are made up of bankers from the very institutions that have lately run amok (and then aground). The Fed sets interest rates and makes important policy decisions about the U.S. economy. But in a perverse reversal of democracy, many of its executives are actually picked and installed in their positions by the private banks themselves. The desire for a more democratic bank dates to the Fed’s creation. Populists like William Jennings Bryan wanted the bank under public control, but banks wanted it controlled by bankers. The bankers won. While most Fed directors are picked by the private banks, the board of governors at the top is appointed by the president. And past presidents have almost always selected yet more bankers for those fourteen-year governorships.

At the moment, the Fed has two vacancies that could be filled by people who actually live up to the Fed’s mandate that governors represent groups like consumers and labor unions. While the first step is to begin appointing Federal Reserve governors who don’t represent the banking industry, the next step would be to let the public choose the second-tier directors rather than the banks, either through elections, state appointments, or other more representative means. If done poorly, political control could mean the bank would do the bidding of whatever political party was in power. But just as the Fed has successfully assuaged private banks’s fears that a member from Citibank would only represent Citibank interests (rather than those of Citibank and the rest of its ilk), so insulation from political influence can be structured into a more responsive, democratic, and transparent Federal Reserve Bank. In this model, nationalizing a bank would mean giving the public a real voice in an institution it already owns.

Read the complete article at:
http://www.dissentmagazine.org/online.php?id=232

The Atomic Show: A view from the Left on nuclear energy

David Walters from Left Atomics and Daily Kos joins Rod Adams for a discussion about atomic energy from a far left point of view. Check out this link to a podcast of the Atomic Show.
http://atomic.thepodcastnetwork.com/2009/04/14/the-atomic-show-131-view-from-the-left-on-atomic-energy/

Rod Adams, host of the Atomic Show and pro-nuclear blogger www.atomicinsights.blogspot.com writes:

It is well known that much of the opposition to nuclear power in the US, Europe, and Australia comes from people who are normally considered to be on the political left. David Walters, a self confessed socialist and long time labor activist has a different point of view. He believes, like I do, that abundant, clean, reliable, atomic energy is a boon for the working class.

Power plants provide good, stable jobs, often at union wage scales. They enable a vibrant local economy and good public infrastructure based on the plant’s addition to the property tax base and the salaries of the workers that get spent in local establishments. They allow generational employment with opportunities for young people to keep living and working in the towns where they grow up if they want to.

Link to Dave Walter's Blogs and Left Manifesto on Nuclear Energy
http://left-atomics.blogspot.com/
http://left-atomics.blogspot.com/2007/06/left-manifesto-for-nuclear-energy.html
http://davidwalters.dailykos.com/

David Sirota: Populism is Popular

David Sirota writing for In These Times www.inthesetimes.com:

April 24, 2009
Newsflash: Populism Is Popular
by David Sirota

In 2006, journalist Christopher Hayes wrote a little-noticed article for In These Times magazine about a proposal in Oregon to crack down on predatory lending. http://www.inthesetimes.com/article/2733/ The initiative had become so popular that conservative legislators supported it fearing that if it were put on the state’s ballot, the resulting gusher of grassroots support would not only ratify the measure, but depose the bank-allied Republican Party, too.

Hayes’ piece was titled “Economic Populism Proves Popular,” the headline a sarcastic middle finger flashed at a political and media Establishment that portrays policies “supporting the rights and power of the people”—i.e., the dictionary definition of “populism”—as somehow anathema to the people.

That depiction, of course, continues today. But now, populism isn’t just popular in America; it is becoming the dominant paradigm, and that has the Establishment frightened.

For years, the country watched its populist desire for health care, tax, trade and financial reform run into the reality of elite politicians handing out trillions of dollars worth of corporate welfare and bank bailouts as the economy collapsed. Not surprisingly, a new Rasmussen poll on attitudes toward government and corporations shows 75 percent of the country “can be classified on the populist or Mainstream side of the divide” while just 14 percent “side with the political class.”

As if to confirm the chasm, this “political class”—consultants, politicians, lobbyists and commentators—has been denigrating populism as too overwrought to be taken seriously. Listen to a typical pundit defending AIG’s bonuses or criticizing demands for a new trade policy, and you will inevitably hear the word “populist” accompanied by the word “rage” and/or “dangerous,” followed by tributes to the status quo.

This elite propaganda, says Georgetown University’s Michael Kazin, dismissively implies “that anger from ordinary people is emotional, coming from people who don’t understand how the economy works and are just lashing out at their social betters.”

The caricaturing cribs from Richard Nixon’s playbook. Whereas the 36th president got himself re-elected by steering the country’s anger at the Vietnam War into anger at countercultural war protestors, today’s political class portrays the public’s outrage as the nation’s biggest problem, rather than what the public is justifiably outraged at.

Today, though, Tricky Dick’s tactics aren’t working, and not just because 2009’s economy is far worse than 1972’s.

This is the era when “You” are Time magazine’s person of the year—an era whose information and interactivity revolution now has us looking to ourselves for direction, not officialdom’s gatekeepers. Additionally, America has lately been taught to expect results from democracy. TV viewers get to decide “American Idol” winners, Facebookers get to change their site’s bylaws and voters get to autonomously use Obama campaign resources to win elections—and we get to do all this from outside the press clubs and smoke-filled rooms.

This profound rewiring of instincts and expectations is why the vilification of “populist rage” has failed as a political barbiturate, why the country still seethes, and why both parties are suddenly listening to “the people” instead of the Establishment. This is why, for instance, Republicans are staging “Tea Party” protests against federal spending and why Democrats are pushing bills to expand health care, re-regulate Wall Street and cap executive pay — because they know the political class, however offended, can no longer stop a voter backlash.

Admittedly, contradiction is everywhere: Republican rallies bewail deficits the GOP manufactured, and Democrats lament deregulatory schemes they originally crafted. But no matter how hypocritical the response is, it is a response, and that represents change from decades of aloof government. It suggests a democratic renewal whereby populism—i.e., advocating what the public wants—isn’t merely one popular brand of politics, but is politics itself.

http://www.inthesetimes.com/article/4388/newsflash_populism_is_popular/

The Campaign to Make America Happen

Progressive Mayor supports school vouchers

Bridgeport Mayor Bill Finch

Columnist Rick Green, writing for the Hartford Courant [www.courant.com], notes that a progressive Democratic Mayor is supporting an experiment with education choice. Support for vouchers is really a liberal position - if not a civil rights issue.

Before More Kids Fail, Try School Vouchers
Rick Green
Hartford Courant
April 21, 2009

Bridgeport Mayor Bill Finch isn't crazy about school vouchers.

But the inequality of our failed system of urban education is even less appealing.

Finch, a liberal Democrat and former state senator in his first term as mayor, stunned observers not long ago when he unexpectedly suggested that using public money to pay for children to go to private schools might help his financially strapped city out -- and provide some hope for poor, minority children.

"It's a shock when you become the mayor of a Connecticut city," said Finch, faced with laying off teachers, shutting programs and perhaps even closing schools this year.

"There is no there, there," he said, bluntly describing his city's inability to pay for vital services.

"We could send children to private school in our city for a fraction of what we spend on public schools," he said. "We need to reduce the number of children in the public school system."

Private schools -- and we're talking Catholic schools -- can do the job "just as well," said Finch. His endorsement of vouchers is based in reality, not antipathy toward public education or some new-found belief in the free market.

He's watching another generation fail.

It's as simple as this: We have been unable to come up with a way to fund public education so that our neediest children get what they need.

Finch's schools are growing more crowded while he sees empty seats in parochial schools.

This makes it pretty hard to argue that the system is working.

Education Commissioner Mark McQuillan cautioned me that while "these are desperate moments for Bridgeport," it is not time to turn away from public schools.

"I don't know that vouchers have proved to be a worthy mechanism or tool to assist poor students," he said. "The real issue is not vouchers but to have adequate funding."

This is what a long line of education commissioners, mayors and urban superintendents of schools have concluded for decades. But what do you do when the politicians and the courts can't come up with a better system? While we wait, the nation's biggest achievement gap between whites and minorities only grows wider.

That's the frustration that Finch faces in Bridgeport. At least he's looking for an immediate solution instead of waiting for a court ruling that may never come.

"I perpetuate the creation of an underclass every day I open my [schools] up, because I can't catch up," Finch explained. "I can't get my kids to catch up."

At some point somebody has to be courageous enough to try something else.

We fund schools based on how wealthy a municipality is, not where the need is.

Meanwhile, our future workforce -- the people who will pay for your retirement -- is going to come from Bridgeport, Hartford and New Haven, where the schools are failing.

John Cattelan, director of the Connecticut Federation of Catholic School Parents, said there are about 400 seats open in Catholic schools in the Bridgeport area, with another 1,000 in Hartford.

"This is a way to relieve the financial stress on these municipalities," said Cattelan, who would like to see tax credits for corporations that help fund private school scholarships.

We can declare that it isn't right to use public money at one of Cattelan's Catholic schools.

But then we must accept over-crowded schools and inferior programs for city children who are years behind their suburban counterparts.

It's what voucher advocate Jay Greene, a professor of education reform at the University of Arkansas, calls "a very uncomfortable choice."

"For how long," Greene asked me, "can you say we don't need vouchers because you are going to improve public schools?"

Finch isn't willing to wait. That's far better than pretending we're fixing the problem.

http://www.courant.com/news/local/columnists/hc-rick-green-0421-column,0,1145473.column

SIngle Payer Health Plan Blows Away the Competition

A new TV commercial promoting Medicare for All a/k/a Single Payer Health Care. Our present medical care system is broken. A single payer health plan would provide universal coverage at a lower cost.

Dean Baker on the Need to Tax the Wealthy

After thirty years of class warfare against the middle class, it is time for the wealthy to pay their fair share. Dean Baker makes an excellent case for why we need a tax on financial transactions.

The Need to Tax the Wealthy
By Dean Baker

April 14, 2009, The Economist

This article is a guest opinion on an Economist online debate on whether or not the rich should pay higher taxes.

The quest to increase taxes on the wealthy is not a gratuitous attack on upper income households; it is driven by the need to raise more revenue to run the government. While many deficit hawks been irresponsible in raising fears of an impending collapse of the American government, the projected deficits for years following the recovery are in fact larger than is desirable.

There are areas of American spending at the federal government level that could be reasonably cut, but even after we have zeroed out the "waste, fraud, and abuse" category of federal spending we will still likely need additional revenue of between 1-2%t of GDP to keep budget deficits in an acceptable range. That leaves a choice between increasing taxes on the wealthy or imposing more taxes on the middle class.

The vast majority of the income gains in the United States over the last three decades have gone to the richest 5% of the population, largely as a result of policies that were explicitly designed to redistribute income upwards. Therefore it is far more appropriate to tax the richest 5%t of families who have prospered than the broad middle class who have suffered.

Of course taxes can be designed in a better or worse manner. The best way to increase taxes on the wealthy, in addition to allowing the Bush tax cuts to expire, would be to apply a modest financial transactions tax (FTT).

There is a long history in both the United States and the rest of the world with FTT. Until 1964, the United States imposed a tax of 0.12% on new stock issues and 0.04% on stock trades. Britain still has a tax of 0.25% on each stock sale or purchase, raising five billion pounds a year. This would be equivalent to roughly $30 billion a year in the American economy.

Robert Pollin and I calculated that a scaled set of FTT on stock, futures, options and other financial instruments could raise approximately $150 billion a year. This would go far towards bringing the long-term budget deficit down to a manageable level.

A FTT would be hugely progressive. While many middle income families own stock, their holdings are dwarfed by the holdings of the wealthy. Furthermore, few middle income families are active traders. Their intention is to hold their stock to support their retirement or their kids' education, not to shuffle it around on a daily or hourly basis. Some mutual funds do engage in frequent trading. An FTT would encourage investors to move their money to funds that are less active traders, thereby allowing them to escape most of the impact of the FTT.

Most of the burden of the FTT will fall on wealthy individuals who are active traders and also on the financial industry itself. Either way, the tax will be overwhelmingly borne by the wealthy. By raising the cost of trading, the tax will discourage the trading that provides the revenue for the financial industry. A well-designed tax should also discourage the creation of exotic assets that may serve little useful purpose, since it could lead to the tax being paid multiple times. For example, the holder of an option on a stock would both pay the tax on the purchase and sale of the option and also on the purchase and sale of the stock itself, if the option was ever exercised.

While most taxes impose some economic cost in addition to the revenue raised, a FTT may actually increase economic efficiency. By discouraging financial transactions that are entirely rent-seeking in nature, a FTT will reduce the resources used up by the financial sector, without affecting at all its ability to serve the productive economy. The reduction in trading volume will of course reduce liquidity to some extent, but American financial markets will still be quite liquid. Even with a 0.25% tax on a stock sale or purchase, transaction costs will still only be raised back to their mid-80s levels. And, the United States had a large and very liquid stock market in the 80s.

There also is a powerful element of justice in imposing a FTT in the current situation. The main reason that the budget situation has deteriorated so much in the last two years has been the damage caused by the irresponsibility and greed of the financial industry. In this way, a FTT can be seen as sort of a user tax, where the industry is effectively forced to pay for some of the damage caused by its practices, just as we might like to tax the output of industries that pollute our air or water.

In short, there is a very good argument for increasing taxes on the wealthy given the current budget situation. The alternative is taxing those who are not wealthy. And, there is no better way to tax the wealthy than to tax their gambling in financial markets. A financial transactions tax will raise revenue at the same time that it makes the economy more productive. This is a genuine win-win situation.

http://www.economist.com/debate/days/view/299

Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of Plunder and Blunder: The Rise and Fall of the Bubble Economy. He also has a blog on the American Prospect, "Beat the Press," where he discusses the media's coverage of economic issues.

Why don't pro-lifers protest insurance industry's discrimination against expectant mothers ?

We never hear complaints about this from the pro-life movement or the many "pro-life" Republicans in Congress, but insurance companies and HMO's are routinely denying maternity coverage to expectant mothers. Why don't pro-lifers protest the outrageous practices of the insurance industry which provides an incentive for abortion ?

The Miami Herald has uncovered the secret rules of HMO's when it comes to pregnancy. According to a handbook by VISTA, an HMO, it says:

"There is no coverage for maternity and routine newborn charges until the initial 15-month waiting period is satisfied. During the first 15 months from the effective date, no coverage is available for pre-natal, post-natal or delivery charges. For all plans, complications of pregnancy are covered the same as any other illness. If it is determined that conception was prior to the effective date, coverage will be voided, and the premium will be refunded less benefits provided. This also excludes elective abortion."

http://media.miamiherald.com/smedia/2009/03/28/19/Vista_Producer_Guide.source.prod_affiliate.56.pdf

With the passage of the Pregnant Women Support Act sponsored by Senator Bob Casey (D-PA), pregnancy will no longer be a pre-existing condition in American health insurance. It will also eliminate the "abortion incentive" that too many women and families face everyday. This is one of the many reasons why Democrats for Life is working so hard to pass PWSA. We want to bring both sides together to agree that there is much we agree on, and making sure that women who want to carry their child to term shouldn't be coerced to end their pregnancy so they can obtain their health insurance.

www.democratsforlife.org

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