Rebecca Rosen Lum, January 3, 2009
A new survey released by AARP offered up some sobering stats: In the past year, 15 percent of adults cut back on medications, or declined to fill prescriptions, because their budgets would not allow it. A separate survey released earlier this month revealed women are skipping routine health exams because the tab is too steep. We can’t argue that such "savings" can lead to costly – and preventable – health crises further down the road. But discouraging women from economizing at the expense of their health raises bitter questions for those without health care, and that is a rapidly increasing number. The number of jobless Americans drawing unemployment checks has skyrocketed from 2.7 million a year ago to 4.5 million today, and experts predicts the unemployment could reach 10 percent by the end of 2009. The maximum amount a person can collect does not allow for the high cost of Cobra, which extends health coverage after a layoff. During the presidential campaign, then-Sen. Barack Obama placed a high priority on overhauling the nation’s ailing health care system. Reform cannot wait until the economy turns around. Universal coverage will insure the nation’s women will see doctors and receive mammograms, PAP smears and other critical screenings swiftly – and save millions of health care dollars and lives lost in the bargain.
Tom Murphy, December 20, 2008
It would be great if the $14.7 billion bridge loan program for the automakers would save the industry, but it won’t. It will give the Big 3 enough breathing room to plead their case again, this time to Barack Obama’s White House – giving the freshman president his first major economic battle. Relatively few Americans have much sympathy for an industry that churned out gas-guzzlers while the Japanese, Koreans and Europeans were focused on more fuel-efficient models. But that course can be reversed. There’s still time for the US to take a lead in producing the best cars in the world. Allowing the industry to fail would simply put millions of Americans out of work, raise the costs of cars in the US and place an added weight on foreign carmakers, which depend on US companies for parts. That said, it isn’t up to the American people to provide the cash flow to keep Detroit humming. The carmakers must right their wrongs, or the bailout will turn out to be nothing more than a bridge to nowhere.
John McGowan, December 10, 2008
During the Great Depression, groups of farmers would show up at auctions of their neighbors� foreclosed farms to discourage (by various tactics, some of which were close to physical intimidation) anyone but the former owner from bidding. At these so-called �penny sales,� farmers re-bought their farms for a few dollars. The practice became so widespread that seven Midwest and Great Plains States outlawed real estate auctions. This week, workers refused to leave the Republic Windows and Doors factory in Chicago after it was shut down. Hard economic times are driving ordinary Americans to actions that are finding wide-spread sympathy. Their obvious question: How come there are bail-outs for the big guys, but none for us? Aside from the justice of their cause, these workers are also paving the way for millions of other Americans who are facing similar situations. Our workers are going to need every strategy they can think of to dramatize their cause is these hard times.
John McGowan, December 1, 2008
Terrorist attacks in Mumbai. Riots in Nigeria. Ongoing political turmoil in Thailand. A renewed civil war in the Congo. And the usual chaos, anger, despair, and killing in the Middle East. We sure have lots to look forward to in the "happy" New Year. About the only consolation I can find is in the miracle that the rule of law and the fundamental stability that comes with it still prevails in the United States. No matter how divisively partisan our disputes sometimes feel, they very, very rarely come close to sparking violence. It’s that stability that offers us the best hope for economic recovery. With so much of the world in turmoil, capital is often going to come to the US as a safe refuge. And it is that commitment to the rule of law that suggests that new regulatory schemes for avoiding the abuses that led to the current financial crisis can actually work. Business leaders in the US moan and groan about regulations, but they mostly comply with them. The blessings of civil peace are multiple and should never be taken for granted. They should be appreciated and enjoyed.
John McGowan, November 25, 2008
Now Citigroup is returning to the $700 billion trough. Apparently it’s first helping of wasn’t sufficient. The obvious question is: why do the financial companies get the government hand-out, but not the auto companies? Arguably, the car manufacturers were just stupid and incompetent. According to Michael Lewis, the financial companies deliberately set out to commit fraud. His lengthy argument makes me feel like I have a handle on how we got into this mess. And it’s enough to make you decide to keep your money in the mattress.
John McGowan, November 16, 2008
I, in fact, agree with Sen. Richard Shelby that the government shouldn’t bail out the auto companies. But that doesn’t change the astounding chutzpah of Shelby’s comments. "Companies fail every day and others take their place. I think this is a road we should not go down," said Shelby, the senior Republican on the Senate Banking, Housing and Urban Affairs Committee. "They’re not building the right products," he said. "They’ve got good workers but I don’t believe they’ve got good management. They don’t innovate. They’re a dinosaur in a sense." Who else but Republican administrations and Republican members of Congress (aided, it is true, by Democrat Dingell of Detroit) have refused to push the automakers to increase fuel efficiency and have undermined those very workers Shelby now praises by giving management free rein to make disastrous mergers, cut pension benefits and generally bungle their way to the current disaster? That Detroit doesn’t get it has been obvious to the markets for over 15 years now, but that didn’t lead any Republicans to actually deliver a sensible energy policy or in any way use government leverage to change to Big Three’s self-destructive insistence on thinking that business deals and getting new concessions from their workers could compensate for consistently bad products that were a testimony to the absolute rule of short-term thinking.
John McGowan, November 9, 2008
What happens to a dream deferred, the black poet Langston Hughes famously asked. His answer: it shrivels like a raisin in the sun. Barack Obama has raised a lot of hopes. Surely he can’t possibly fulfill them all at once. Will he end up a victim of the huge expectations he has encouraged? I, for one, hope (there’s that word again) that Obama will stick with a very ambitious program. Health care, tax reform, and Iraq are all going to prove tough issues to get done right, which is exactly why it would be foolish to delay tackling them. A president is strongest in the first few months after election. Obama should capitalize quickly on the enthusiasm of this fall. He will not have a compliant Congress forever, but he should get fairly complete cooperation from his party for at least six months. Making serious headway on the health care mess would, in itself, be a major accomplishment, one for which a majority of Americans would feel grateful.
John McGowan, November 5, 2008
The election is over. Now it’s time to get down to business. There are so many things wrong with our country that you almost have to feel sorry for Barack Obama. He is going to have to tap into the enthusiasm that his campaign has generated, while he is going to have to scour the land to find—and bring to Washington—the talented people who can make our government and our economy functional. As many historians have commented, when FDR came into office in 1933 he tried everything and anything. Lots of what FDR did proved unsuccessful, but it the most important thing was to communicate that the government cared and that it would not sit by idly while Americans suffered. If he hadn’t tried, we wouldn’t have Social Security today. I, for one, hope Obama takes a similar approach. If he is going to fail, let it be from boldness not timidity. We have big problems—from the economy and health care to the environment and the two wars—that require big solutions. Tinkering around the edges and piecemeal reforms will not get the job done. Buckle your seatbelts, America. It’s already a bumpy ride, now let’s see if it becomes a faster one.
John McGowan, November 4, 2008
In the tri-city Triangle of North Carolina where I live – Raleigh, Durham and Chapel Hill – Durham is the black city. And the city is ready for a very big party. They’re blocking off most of downtown in anticipation of large crowds. It’s a testament to how long this campaign has been that the fact of Obama’s race has been shoved to the background for many – let’s hope all – voters. Blacks haven’t forgotten that this election is special. Here in the South, the possibility of Virginia and North Carolina going for Obama suggests that the bitterness over civil rights may be about to fade into the historical sunset. With the influx of Hispanics and Asians into North Carolina, the stark lines between black and white have been blurred and the old racial obsessions seem more and more irrelevant to the way life is lived on the ground—until you drive through the slums of east Durham. Can an Obama presidency lift the residents of those slums up? That’s a tall order. No other president of the past 50 years has managed to do them much good. But an Obama victory will give those people hope and pride, will give them something to celebrate after long years of hardship. Think about it. When was the last time African-Americans had something to celebrate together as a pure triumph? It’s going to be a hell of a party.
John McGowan, October 27, 2008
Admit it. You lost interest in this presidential campaign at least a month ago. You have a life—and wish the news media and the candidates would admit they’ve also gotten bored. If John McCain is on the TV talking it’s as if he was trying to remind us of the weird incomprehensible event called the Iowa caucuses that almost took place in 2006—for God’s sake—this election cycle. Can we do something now, in the full spirit of bipartisanship, to spare ourselves this 30 month agony? Develop a sane and understandable nomination process? And while we are at it, could we standardize registration and voting procedures around the country so we are spared the law suits, skullduggery, and general mayhem that now surrounds each election. Finally, since there is no point in dreaming if you don’t aim for the stars, could we get rid of the Electoral College? Maybe then the candidates might actually put in an appearance during the campaign in states like California, Texas, and New York, which just happen to be where lots of voters live.
John McGowan, October 24, 2008
Half of Virginia dismissed as communist, tires slashed in North Carolina, death threats to the Secretary of State in Ohio. Run a negative campaign and you license all the loonies. The far right fringe is working itself into a frenzy as the election approaches. The last time we saw this kind of rhetorical excess directed at a democratically elected Democrat, we got Oklahoma City and an impeachment. The right apparently thinks that it owns this country and is fully justified in declaring who counts as a true American and who doesn’t, who counts as a legitimate leader and who doesn’t. McCain’s own obvious anger at this point in the campaign is barely under control, while the violence of his most extreme supporters is already spilling over the retaining walls.
Tom Murphy, October 15, 2008
For most, the turning point of the Vietnam War was the Tet offensive that drove back US troops. For me, it was when Walter Cronkite expressed his doubts about the American effort. Today, as the world is embroiled in crises ranging from Wall Street, to Georgia, Pakistan, Afghanistan and Iraq. Global warming threatens our very existence. The longevity revolution threatens to impoverish tens of millions of aging citizens, who’ve paid for Social Security and Medicare all their working lives. And the American dream of home ownership has turned into a nightmare for millions of hard-working people. Most of these problems didn’t exist eight years ago, and there’s been almost no progress towards resolving the ones that did. Amid all this, Walter Mears, a legendary newsman who spent 45 years covering politics, mostly for The Associated Press, has emerged from retirement to tell us something most of us can see: President Bush has failed to provide the leadership needed at this time. We look forward to the election, and to regime change in Washington.
John McGowan, September 29, 2008
What’s coming down the pike? It’s pretty certain that it’s not going to be the good news, especially where the US economy is concerned. The short-term prognosis is terrible and the long-term fundamentals worse. But here’s a silver lining. The Depression caused a lot of suffering – and a realignment of the American economy. From 1933 to 1973, economic inequality in America declined, creating that vast middle class of which we have so rightfully been proud. Since 1973 the middle class has been decimated, split into an upper, professional middle class that has done alright for itself and a non-professional middle class that has steadily lost ground. Meanwhile the excess wealth, the part that used to go to that non-professional middle class, has been Hoovered up by the very wealthy. Maybe the outrage generated by the bailout, along with the coming economic downturn, will provide the political will and clout to actually turn the post-1973 trend around. Redistribution of wealth? You bet. Wealth’s been relentlessly redistributed upward over the past 35 years. A correction in the other direction is long overdue.
John McGowan, September 29, 2008
It looks like most everyone will hold their noses and vote for the bailout plan. House Republicans may very well refuse to come along, but the Democrats can live with that unless John McCain also decides his best chance is to sucker the Democrats into backing the Republican president while he runs on being a “maverick.†There’s no telling what McCain might do; his behavior the past week gives a whole new meaning to the word “erratic.†But when it comes to choosing between its populist and its business wings, the Republican Party has generally understood which side its bread is buttered on. The bailout stinks. Make no mistake about that. But doing nothing is not really an option. And doing what the House Republicans suggested is worse than doing nothing since they seem, once again, to not have the slightest idea of how a modern economy works. All they can keep repeating is the old Reagan mantra of government being the problem and of cutting taxes, when the first is patently not true in this case and the second is irrelevant.
John McGowan, September 22, 2008
If the Bush Administration tried to ruin America’s economy, it could hardly have achieved that goal more quickly then its spend-now-pay-later policies have done. Feckless is the best word to describe its three page sketch of a bailout plan that will cost $700 billion. Basically, their message is “trust us.†Yes, Henry Paulson solemnly tells us, the regulatory system needs an overhaul. (He doesn’t mention that it might be just fine, and that our current mess comes from non-enforcement, not bad rules.) But first, pass the bailout package, since speed is of the essence—and then we’ll get to the messy details of reform later on. In other words, sell the store, then try to bargain with the new owner over the details of the sale afterwards. If the past 40 years have anything to teach us, it is that only government has the slightest ability to stand up to the power of business, and that business left to its own devices will foul the nest that lays the golden eggs. Here we are, in the midst of one of those periodic crises that seem to be getting more frequent, with everyone assuring us that this crisis dwarfs the savings and loan mess, the 1987 crash, and the dot.com bust. Yet the resistance to any coherent or enforced government regulation continues as the Bush administration plans to rob the federal treasury to pay for Wall Street’s greed.
Tom Murphy, September 18, 2008
It’s hard to say what would have happened if AIG had crashed and burned. Instead, the government bailed it out with a loan based on the company’s risky assets. Just two days earlier, the government declined to extend the same courtesy to Lehman Brothers, but there are a couple of differences worth noting. First, if AIG went under, it probably would have created a financial tsunami capable of triggering economic panic around the globe. As it is, the idea that the insurer is now partly owned by the US – a government not known for cost-efficiency – is frightening enough. Second, Lehman had another way to go, which has become obvious now that Barclay’s has agreed to buy part of the trouble US investment bank. Lehman shareholders took a huge loss, but that reflects the risk of holding onto a troubled financial stock long after many other investors bailed. Would someone have bailed out AIG? Probably not, given that the few firms big enough to do so aren’t looking to add more risk to their portfolios. What’s an individual investor to make of all this? First, if you can’t risk a huge loss in your retirement portfolio, don’t buy risky financial stocks – no matter how much they’ve fallen. The market isn’t dumb. Those stocks are cheap for a reason. Second, take a look at your own portfolio. Where are the risks? What’s done well? How much cash do you have if things go south? We could be facing years of financial turbulence. If things get really bad, do you think the government will bail you out, like it did with AIG? Or will it leave you on your own, like Lehman?
Tom Murphy, September 16, 2008
It’s a relief in many ways to see Uncle Sam refraining from rescuing Lehman Brothers, the venerable Wall Street investment bank that, among other things, helped to finance the transcontinental railroad. This action was a lot different from the case earlier this year where the government did step in to finance the takeover of Bear Stearns. At that point, the credit crunch was little understood and was getting much worse. And it’s different from the case with Fannie and Freddie, institutions whose main assets are middle class American homes. In this case, Lehman has been teetering on the brink for months and had lots of time to fix its problems or shop itself to would-be suitors. Ultimately, it faltered because it waited too long. It’s very sad for investors who held onto those shares for too long; they could have sold long ago. But by letting the big bank fail, the government reminded us that investments on Wall Street at times like these carry a lot of risk – a lesson that applies to those planning a retirement as much as it does to the financial industry’s biggest players.
John McGowan, September 8, 2008
The credit mess is the trouble that just keeps on coming while the federal government remains the sugar uncle that just keeps on giving. As the old saying goes, the only risk-free way to rob a bank is to own it.While they are making profits, financiers describe themselves as noble risk-takers who are only reaping the just fruits of their heroism.But when the losses start, the whole financial edifice on which our economy is based cannot be allowed to collapse;Uncle Sam to the rescue again.Freddie and Fannie, it now seems clear in retrospect, were a bad idea, some kind of unworkable hybrid between a private, free-market financial institution and a nationalized loan provider.Don’t believe for a minute, however, that it was a honest mistake that created Fannie and Freddie. The financiers knew exactly what they were doing when they created entities that would deliver all the profits to private investors, but make all the losses come out on the government’s tab.The only good that can come of the current credit crisis is a totally revamped financial system that brings some sanity back by placing risk squarely on those who loan out the money.Don’t hold your breath in anticipation of such reform.There are powerful economic players who, for reasons perfectly obvious, like the game played by its current rules of I win, you pay and I lose, you pay. A craven Congress has not, over the past 40 years, shown any inclination to stand up to those players.
John McGowan, September 2, 2008
How extensive was the background check performed by John McCain and his campaign team on Sarah Palin? We now know that McCain only met Palin once four months ago and that he spoke to her once briefly on the phone before presenting her as her VP choice. That presentation included her lie about being against the infamous “Bridge to Nowhere," while the McCain campaign apparently was unaware that she, as governor, supported – and got passed – a windfall profits tax on the oil companies. They also seemed to have missed that she is under investigation from a bipartisan legislative committee for abuse of power. With all these oversights, can we really believe that they did know all about her daughter’s pregnancy? Are these really the people we want running our government? At best, McCain and his team have been revealed as incompetent; at worst, they have displayed an astounding lack of judgment about something that is not only important but also that they had every reason to do right.
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