We Are Who We Want To Be: Dreamers

Here’s a sample of what Nevada Representatives Joe Heck (R-3) and Mark Amodei (R-4) voted against on June 6, 2013 in the Congress of the United States of America –

“For most of her life Anna Ledesma has been afraid. She was a model student at Centennial High School in Las Vegas – an artist and a member of Key Club. As one of the top academics at her large high school, she received the Millennium Scholarship to study nursing at the College of Southern Nevada. Now she’s studying hard for her nursing exams. But 23-year-old Anna has lived for a long time with the constant fear that she will be deported.

Anna is an undocumented immigrant. She was born in the Philippines and brought here by her parents when she was 7 years old. She was in the second grade.”  [Reid Senate]

Individuals like Anna Ledesma are the reason for the Morton Memo directives.   And, as noted yesterday, on June 6th Representatives Heck and Amodei voted in favor of the King Amendment to H.R. 2217 which would prohibit implementation of those directives.

Yeah but: She’s still an “illegal immigrant.”  Coming here illegally is a crime.  Not so fast.  Note that Anna came here at age 7.  Nevada law is specific on the subject of who can be punished for a criminal act — and who can’t.

“NRS 194.010  Persons capable of committing crimes.  All persons are liable to punishment except those belonging to the following classes: 1.  Children under the age of 8 years. 2.  Children between the ages of 8 years and 14 years, in the absence of clear proof that at the time of committing the act charged against them they knew its wrongfulness.  3.  Persons who committed the act charged or made the omission charged in a state of insanity.”

You don’t have to get any further than item one to determine that she was not old enough to be legally capable of committing a criminal act in the state of Nevada.

The Infancy Defense is slightly different in the federal courts.  In terms of Common Law,  persons under the age of seven are presumed incapable of forming the requisite intent to commit a criminal act; a person between the ages of 7 and 13  “a child is rebuttably presumed incapable of forming a culpable mental state. ” [C&D]   U.S. law presumes the applicability of the infancy defense for children under the age of 11.

Yeah but:  “Dreamers” will crowd into our institutions of higher education and place an unconscionable burden on our already cash strapped institutions. [CIS] We could fix that by adequately financing our public colleges and universities — but that would require someone to pay some … taxes.  Most radical right arguments assume a high number of enrollees, and further  presume that no one — under any circumstances — should ever pay more … taxes.   Conveniently omitted from the conservative assertions is the fact that immigrant families DO pay taxes, and they also tend not to take into consideration the fact that individuals, like the Dreamers,  who complete college degrees add to the U.S. economy.

As of May 2013 the unemployment rate for persons with less than a high school diploma was 11. 1%.  The unemployment rate for high school graduates was 7.4%.  Those with some college experience or an associates degree are looking at an unemployment rate of 6.5%, while those with a college degree (or more) are experiencing an unemployment rate of 3.8%.  [BLS Table A4]

The logic is relatively simple — since those with more education are less likely to be unemployed they must be in the work force.  If they are in the work force they are earning money, with which they will make consumer purchases and pay taxes.   Why wouldn’t a government at any level want more individuals enrolled in post secondary education?  It pays off in the long run.

Meanwhile back at Senator Reid’s exemplar — I thought we needed nurses?  The median age of a nurse in this country is 46 and some 50% of our nurses are nearing retirement. [ANA]  Those who argue that there is no current nursing shortage (WSJ) seem to be assuming the recession is going to last forever.  Those nurses who put off retirement during the downturn are going to be looking at the prospect again as the overall economy improves.  And it does look to be improving for those in the “education and health care” sector, which saw a 5.3% unemployment rate in May 2012 and a 4.8% rate as of May 2013.  [BLS Table A 14]  The Occupational Outlook for registered nurses is a “faster than average” rate of +26% during the 2010-2012 decade.

Median pay for a registered nurse is about $65,000 annually.  [OOH]  So, if we perhaps had a few more individuals who would like to complete the training necessary to enter a field with optimistic prospects for employment, and to earn $65,000 per year which in turn flows into the economy with some of that amount paid in taxes — What’s the problem?

Yeah but: This is sending a “horrible message.”  [Atl] All those “illegal” people will clamor to send their children to American schools…. Kids the world over will leave their friends, their families, and their homes to come …. Whoa.  Some few might leave their families, but anyone who’s ever been accompanied by an adolescent offspring on vacation knows full well that removing the said adolescent from the peer group — even temporarily –  is the social equivalent of multiple root canal surgeries. So, if the extrapolation of Immigration Nightmares is patently irrational, what explains the opposition?

If the message that we want ambitious, education oriented, civic minded, enterprising, and industrious  individuals to come to this country is “horrible,” what would be the reverse position?  Not to put too fine a point to it, but for some opponents of immigration reform the answer is “Nobody.”  No one would be welcome, and they’d be even less welcome should the persons in question be non-WASPs.

This has been an all too common refrain, a chorus repeated as The Nation Was Being Changed From What We Were by — Germans, Irish, Italians, Poles, Slovaks, Russians  — OK we’d have missed out on John Jacob Astor (born Heidelberg), the ancestors of Bill O’Reilly and Danica Patrick, Domingo Ghirardelli (Who doesn’t love chocolate? Born in Rapallo, Italy),  Max Factor, Sr. (born in Lodz), the fourth son of Slovakian immigrant Andrej Varhola, known to us as Andy Warhol,  and Yuliy Borisovich Briner (born Vladivostok, AKA Yul Brynner).     With no apologies to any of the Nativists — if they can indeed figure out who besides the Native Americans actually ARE natives — the Astors, the Patricks, the Ghirardellis, the Factors, the Warhols, the Brynners, the Longorias, the Musials, the Goldwyns, the Warners, the Sikorskys, the Sanchezes, the Trevinos, the Hinojosas — ARE who we ARE.

Maybe we were sending the right message all along?

Recommended Reading: Wall Street and Elm Street

We’re all happy to see housing prices increase in Nevada, especially in the hard hit Las Vegas metropolitan area.  Before putting on the party hats and dancing to the old ’45s there’s a reason for the increase which might initiate a few nagging doubts in the back of the cranium.  Read: “Behind the Rise in House Prices,” from the NYT to see how Wall Street is cashing in on the chaos it helped to create.

The story has been around for a while, but few in what passes for  national news have picked up on it.  Forbes Magazine does have the presence of mind to ask if we’re looking at the beginning of the next bubble.   The Wall Street Journal published a piece on this subject on March 25th, regarding investors as landlords.  The downside of this new lure for investors is that regular buyers are finding themselves out of luck in this new market.

In the “real” economy buyers and sellers exchange bids and enter into transactions, in contrast to the financialist economy in which investors pour cash into what they hope will be profitable investments.  Wall Street can securitize the rental revenues, hedge its investments in real estate with derivatives, and engage in all manner of market manipulation to secure revenues.

The only “real” pieces of this ever burgeoning pie are  the houses the investment firms bought up on the cheap after their last adventure in Derivatives Land went south.   Beware, that what we may be looking at in terms of the housing market is a very stale cake iced over with a lovely gloss of investment house cash.   Or, given the stagnant level of wages and salaries in this country, pretty much what we were looking at a few years back, when people were encouraged to take out exotic mortgages for properties they really couldn’t afford at the time.  The difference now may only be that the excess inventory in housing is now being siphoned off by the investment firms.

What we’d all really rather not see is a repeat of (1) debt financed consumption, supported by (2)  inflated asset prices, while (3) large banks and lending institutions are attracted to asset based securitized mortgages (too often subprime) because Treasury bond yields remain low.  We’ve seen this movie before, and Katherine Rushton explains in the Telegraph, why we don’t want to see it again.

Amodei, Heck Join Big Bank Boys Club: H.R. 1062 Protects Wall Street

Almost lost in the hyperbolic distractions so beloved by the D.C. press, was the House passage of H.R. 1062 on May 17, 2003, a bill to gut the capacity of the Security and Exchange Commissions rule making to protect American investors.   And, Nevada Representatives Amodei (R-NV2) and Heck (R-NV3) voted in favor of it.  Representatives Titus (D-NV1) and Horsford (D-NV4) voted against H.R. 1062.

What did they support?

“SEC Regulatory Accountability Act – Amends the Securities Exchange Act of 1934 to direct the Securities and Exchange Commission (SEC), before issuing a regulation under the securities laws, to: (1) identify the nature and source of the problem that the proposed regulation is designed to address in order to assess whether any new regulation is warranted; (2) use the SEC Chief Economist to assess the costs and benefits of the intended regulation and adopt it only upon a reasoned determination that its benefits justify the costs; (3) identify and assess available alternatives that were considered; and (4) ensure that any regulation is accessible, consistent, written in plain language, and easy to understand.”  [Thomas CRS Summary] (emphasis added)

Oh, how the Wall Street Wizards will love this one! The Little Wizards in the investment banking sector have long wanted all regulators to use the “cost/benefit” standard for restraining the excesses of investment enthusiasm.   H.R. 1062 seeks to gut the Dodd-Frank financial reform statute enacted in the wake of the Mortgage Meltdown and attendant financial machinations, and unleash the Wall Street Wizards from all regulation “past, present, and future.”  [HuffPo] We already have “cost/benefit analysis”  built into the system — so why another bit of legislation?

Here’s the little kicker in the bill:  “This bill was transparently designed to allow each regulation to be challenged in court by industry, but not by consumer advocates.”  [HuffPo] Got it?

Evidently, Representatives Heck and Amodei believe this to be a good idea — that the financial sector battalion of legal expertise may challenge each and every regulation proposed by the Securities and Exchange Commission — but the rules may NOT be challenged by consumer advocates.

As Representative Gwen Moore (D-WI4) explains:

“The ink would not be dry on a SEC rule before the race to the courthouse door to challenge the regulations would begin. Presumably, the most powerful industry participants would challenge the rules in the way that achieves their narrow interest, which may be to the detriment of investors or other less-affluent market participants. In this way, the most powerful industry interests would be able to not only use the courts to undo consumer protections, but to also seek competitive advantage over competitors.”

The big get bigger, the fat get fatter, and the rest of us sit waiting to find out how best to serve the Big Bankers on Wall Street.

But wait! It gets better — if you happen to be a Big Banker on The Street:

Requires the SEC to: (1) consider whether the rulemaking will promote efficiency, competition, and capital formation; (2) consider the impact of the regulation upon investor choice, market liquidity, and small business; (3) explain in its final rule the nature of comments received concerning the proposed rule or rule change; and (4) respond to those comments, explaining any changes made in response and the reasons that it did not incorporate industry group concerns regarding potential costs or benefits. [Thomas CRS Summary] (emphasis added)

Any rule has to promote “capital formation?“  Translation: No SEC rule may prevent any investment banking operation from accumulating capital (money) just about any way it wants to, and even further — if the rule does prevent some Wall Street investment house or Monster Bank from accumulating all the coin of the realm it wants then the SEC has to explain (presumably to Wall Street’s satisfaction) why “industry group concerns” weren’t incorporated into the rules.  Another translation might be in order:  The SEC can’t propose and adopt any rule Wall Street doesn’t like.

Wall Street would like to modify some existing rules (like those pertaining to the Dodd-Frank Act) and H.R. 1062 offers them a way to do that:

Requires the SEC to: (1) review its existing regulations periodically to determine if they are outmoded, ineffective, insufficient, or excessively burdensome; and (2) modify, streamline, expand, or repeal them.  [Thomas CRS Summary] (emphasis added)

How nice.  Now, just what does “excessively burdensome” actually mean?  The standard Wall Street dictionary applies the term to any regulation they don’t like.   Is it “excessively burdensome” to require a Wall Street firm to report what it’s doing with derivatives? Is it “excessively burdensome” to make Wall Street stop playing casino games with people’s mortgages?   If the rule isn’t “excessively burdensome,” then how about making rule proposals almost impossible?  The bill had a little something for that prospect too:

“Requires the SEC, whenever it adopts or amends a major rule, to state in its adopting release: (1) the purposes and intended consequences of the regulation, (2) the post-implementation quantitative and qualitative metrics to measure the economic impact of the regulation and the extent to which it has accomplished the stated purposes, (3) the assessment plan that will be used under the supervision of the Chief Economist to assess whether the regulation has achieved those purposes, and (4) any foreseeable unintended or negative consequences. Requires the assessment plan to: (1) consider the costs, benefits, and intended and unintended consequences of the regulation; and (2) specify the data to be collected, the methods for its collection and analysis, and an assessment completion date.”  [Thomas CRS Summary]

Got all that?  How is an “unintended consequence” foreseeable?  That’s why they’re called “unintended” in the first place.   So, the SEC cannot enforce any rule which might at any point in the future have an “unintended consequence” because that would violate the provision calling for a full assessment of the development of the rule.

After this bit of legislative legerdemain on behalf of the Big Banks and their cohorts on Wall Street, Representatives Amodei and Heck have not a quarter of an inch of room to talk about protecting small businesses — who are all too often at the mercy of the Big Banks, nor do they have any leeway to discuss protecting investors and their retirement accounts.  Nevada homeowners facing all manner of difficulties with mortgages that were sold off in packages and then bet on more enthusiastically than the Kentucky Derby might want to inquire precisely how Representatives Amodei and Heck are protecting their interests?

Representatives Heck and Amodei have joined the Big Bank Boys Club in this vote; a connection avoided by Representatives Horsford and Titus.

If you are not a resident of Nevada and would like to see how your Representative voted on this egregious bit of pandering to Wall Street and Big Bank interests click here.

At Play In The Fields Of The Frontier Markets

Repeat: One man’s debt is another man’s asset.  Repeat: The higher the yield the higher the risk.  The higher the risk the more likely something will go haywire.  And, why repeat these boring bits? Because,  if one is sitting in Nevada (or Florida, or Arizona) and still looking at an economy which is sluggish for the average family and volatile for the 0.1% investor — The Players Are At It Again.

Some time in the future — one can only hope it isn’t soon — the term  “Frontier Market” is going to come back to haunt someone, and we might wish to pray that not only is the backwash not immediate, but also that it doesn’t repeat the last financial debacle.

Tucked into Reuters’ reporting of market news was this article which may prove altogether too prescient:

“With the world’s biggest central banks driving yields on safe assets to near zero, some investors are tossing caution to the wind and rushing to buy illiquid and previously overlooked bonds sold by countries with no capital markets track record.”  [Reuters]

If this sounds too familiar, it should — it should have reminded someone of Argentina (1992-2002) the Asian financial calamity (1997) and the mess in Russia (1998) which brought down Long Term Capital Management.  We ought to take a second look at what happened in the LTCM mess:

“Long-Term Capital was advised by finance quants, or quantitative analysts, who made a number of unsound, esoteric bets, including investments in interest rate derivatives. When Russia’s inability to pay its debts roiled global markets, the fund, saddled with high-leverage and off-balance-sheet obligations, was near collapse.

Because Long-Term Capital owed large sums to banks and other financial institutions, the Federal Reserve Bank of New York organized a consortium of companies to buy it out and cover the debts. Alan Greenspan, then the Fed chairman, eased monetary policy to restart capital markets, which were starting to freeze up. Long-Term Capital’s shareholders were wiped out, but none of the creditors took losses.”  [NYT]

Quick summary:  A large hedge fund, guided by quantitative analysis (but not exactly a boatload of common sense), took positions in debt issued by Russia.  Because the hedge fund owed large amounts to “other financial institutions” (read: banks and other funds) when the Russian economy collapsed the Big Hedge Fund blew up, and the creditors (those other banks and investment firms) were about to get not only a hair cut, but possibly get their heads shaved.  Not surprisingly the financial markets began to “freeze up” (Does this sound familiar?)  Enter the first big government bail out of the Era of the Financialists.

This wouldn’t be the first or last time the bankers blew it.  Consider Mexico in 1994, those investors bought Mexican debt in pesos and were repaid in dollars — but the Mexican government didn’t have sufficient reserves to keep up the fixed rate repayment.  At this juncture a sentient creature might have wanted to ask: Why am I buying debt without checking to see if the nation in question has ample reserves to repay it?  Not enough investors (and their institutions) ask the question, and the result was messy.  The U.S. ended up buying pesos on the open market, and then added loan guarantees  to the tune of some $50 billion.

So, now let’s add “investors” interested in buying Paraguayan, Bolivian, and Honduran debt in 2013.  Just for good measure we can toss in some Vietnamese and Romanian debt as well.  These nations are issuing debt (bonds) and “investors” are buying it up.

Paraguay offered bonds at 4.65% interest (yield) on January 17, 2013.   Reuters reported: “Paraguay, one of South America’s poorest and most unstable nations is expected to see a strong economic rebound this year and the government is keen to tap increased investor interest in smaller emerging market issuers.”

U.S. Treasury bonds are currently going for 1.95% for ten years.  [Treasury] thus for the Greed Is Good Crowd that 4.65% might be very appealing?  However, that “poorest and most unstable nation” thing might give a few individuals pause.

Honduras was rated B+ by S&P when it issued its international bonds at 7.5%, mature in 2024.  They are involved in a $205 million lawsuit concerning a state owned logging company which caused Barclay’s to pull out of the deal. [Bloomberg] But Gee! doesn’t that interest rate look enticing? There’s just a bit of a problem — Honduras has “gang problems,” $6 billion in foreign debt, and an internal debt that’s tripled since 2010.  [AJTV] What could possibly go wrong?

Guatemala entered the lists: “Guatemala, rated two steps higher than Honduras at BB, sold $700 million of 2028 bonds to yield 5 percent on Feb. 6, according to data compiled by Bloomberg. The yield on the bonds has fallen to 4.95 percent since they were issued.” [Bloomberg] The fact that 54% of the nation’s citizens are living in poverty ought to be some kind of clue about its economy, and the fact that  the highest income earners are responsible for 42+% of the nation’s consumption might also be a sticky point. [CIA]  The State Department offers this caution: “Guatemala continues to face major challenges to successful development, including poverty, malnutrition, and vulnerability to economic fluctuations and natural disasters. The Guatemalan government also faces the challenges of corruption and the presence of transnational organized crime.”

Just imagine for a moment if Burnham Down & Crash LLC,  bought up some Paraguayan, Honduran, and Guatemalan bonds, which they mixed with some U.S. bonds (1.95%), some bonds from Great Britain (1.95%), and some German bonds (1.37%).   A bit of careful slicing, dicing, and repackaging could be used to manufacture “Unlimited Horizons” — a bond offering for “investors” (read: Other Bankers).  Incorporate a touch more Magic Hands and the bonds from “Unlimited Horizons” could be repackaged with bonds from “Blue Skies” yet another mixture of national paper, and an admixture of really good investments piled in with some really questionable ones.  Is this sounding familiar yet? Clue: Think Housing Bubble.

How many of the bonds from the shaky sources have to default before the investors are looking at the financial equivalent of Sweeney Todd’s barber shop?  How many investment houses are going to be involved in the purchase of these bonds and their derivatives before the Major Bankers “have to step in” and announce austerity measures so that the small debtor nations can repay the investors?  Clue: Look at Greece? Cyprus?

How many of us on this planet would be just as happy if the bankers had not decided to play in those debt markets in the first place?

It isn’t as though the bankers didn’t learn anything from Argentina, Mexico, the Asian markets, and Long Term Capital Management — from Lehman Brothers, or from the Mortgage Meltdown — it really doesn’t look like they’ve learned anything.

Nevada GOP Reps Support Assault On 40 Hour Work Week

Representatives Mark Amodei (R-NV2) and Joe Heck (R-NV3) voted on May 8, 2013 in favor of H.R. 1406 “To amend the Fair Labor Standards Act of 1938 to provide compensatory time for employees in the private sector.”  [roll call 137]  The CRS Summary describes the bill:

“Working Families Flexibility Act of 2013 – Amends the Fair Labor Standards Act of 1938 to authorize private employers to provide compensatory time off to private employees at a rate of 1 1/2 hours per hour of employment for which overtime compensation is required. Authorizes an employer to provide compensatory time only if it is in accordance with an applicable collective bargaining agreement or, in the absence of such an agreement, an agreement between the employer and employee.”

Trade your time and a half for comp time? What could possibly go wrong? Let us count the ways!

#1. Right off the bat, this is a frontal assault on the 40 hour work week.  The old system, in place since 1938, (pdf) is a dis-incentive for employers to demand longer hours of their employees because over-time costs more, one and one half times more.  This Republican “innovation” allows employers to require more over time work, without any extra compensation.

#2. There are limits on the employee, not necessarily on the employer. For example, under the terms of the bill employees may not accrue more than 160 hours of comp-time in any calendar year.  If there are approximately 260 work days a year (52×5) and we take out 5 for holidays leaving 255 days, then we’d have a total of 2,040 work hours (255×8) during a calendar year.   160 hours is about 8% of the total number of annual work hours.  In some jobs it wouldn’t take much to hit the limit quickly.

#3. H.R. 1406 slaps the wrists of employers who coerce employees into taking comp-time rather than over-time payment with a serious application of a soggy noodle.

“Makes an employer who violates such requirements liable to the affected employee in the amount of the compensation rate for each hour of compensatory time accrued, plus an additional equal amount as liquidated damages, reduced for each hour of compensatory time used.”

Got that?  If an employer threatens an employee who doesn’t want to take comp-time, the employee will be compensated for the “lost hours” plus liquidated damages MINUS each hour of comp-time used.  So, hypothetical Mr. Grinch demands that his employees participate int he comp-time scheme.  Miss Cindy Lou doesn’t want to participate, but is given a “choice” by Grinch to either take the comp-time or (a) get nothing or (b) get canned. She takes the comp-time.  When she complains to authorities she’s to be “paid” back but the time she took off (at the firm suggestion of Grinch) is counted against her?  Lovely.   The “choice” to take uncompensated time off isn’t a viable choice for most working families.

#4. Nothing in the bill requires the employer to be consistent about over-time or comp-time policies.   In fact, an employer can shuck the comp-time scheme if he or she gives the employees 30 days notice.   Then there’s the matter of when the comp-time will be taken.  It would be in the employer’s interest to have employees work over-time during peak seasons and  give comp-time during slow periods.  There’s NO flexibility for employees if the employer is the one determining when the leave can be taken.  Does Cindy Lou need to cash in some comp-time because The Kid is out of school with chicken pox?  Nothing in the bill requires any employer to award comp-time except at his or her own discretion.  This is “flexibility” for the employer and the same old (but this time uncompensated) routine for the employee.

#5.  Employees could easily end up bankrolling the employer in this scheme.  Here’s one example:

“That’s because employers would be able to pay workers nothing at all for overtime work at the time the work is performed and could schedule comp time off at no extra cost to them (for example, during less busy periods when co-workers can pick up the slack). So, when employees request comp time, they essentially become lenders to employers. For example, a worker earning $12 an hour and banking the maximum amount of hours (160) would be giving an interest-free loan of $1,920 to his or her employer.” [AFLCIO]

If we pick the thread in #4, in which the comp-time is scheduled at the convenience of the employer, and the employer is getting the services of the employee at NO EXTRA CHARGE, then those 160 hours of accrued time become a form of freebie loan to the employer.

The Republicans in Congress appear to take some pride in saying they are “pro-business,” and that they promote “pro-business” policies — you can’t get much more pro-business than assaulting the requirement of the 40 hour work week, or the eight hour day, or the notion that employees should “donate” their time to their employer.  What’s next?  By GOP lights should families have the “flexibility” to send their 10 year old kids into the factories? Only in the burbling boiling  cauldron of crazy — does H.R. 1406 constitute a “pro-family, pro-worker” act.

Representatives Horsford (D-NV) and Titus (D-NV) had the good sense to vote against this patently pro-sweatshop bit of legislative stew.

Giving Your Local Government The Twinkie Treatment?

Those wonderful people who brought Hostess Brands, Inc. to its knees and left the country bereft of Twinkies for a time — are back.  This time they’re looking at the city of Detroit, Michigan.  [Reuters] To wit:

“Monarch Alternative Capital, which played a major role in the bankruptcy of Twinkie-maker Hostess Brands Inc, and several other funds have scooped up more than $600 million of debts of Jefferson County, Alabama, according to court records.  But nowhere is attracting more attention than Detroit.  With $8.6 billion in long-term debt, Detroit would be comparable to the biggest corporate failures if it eventually files for bankruptcy, a major advantage for big hedge funds that are used to investing hundreds of millions of dollars at a time.” [Reuters]

What could possibly go wrong?  Let’s review.  Buying up ‘distressed debt’ isn’t anything new — as long as there were corporate bankruptcies aplenty vulture capitalists could purchase debts and then ‘assist in the process of turning companies around.’  The first problem for the vulture squadron is that corporations are now sitting on loads of cash.  There just aren’t as many shaky corporations as there used to be — companies like Hostess Brands, Inc. with a dubious history of mismanagement and duplicitous dealings with its workers.  The second problem for the flying Cathartes Aura  Crowd is that they need to find “investment” opportunities for their own cash.   When Investment meets Opportunity there’s the possibility of a down-side, elegantly demonstrated in Jefferson County, Alabama.

The Jefferson County Debacle

In 1996 Jefferson County, Alabama decided to repair and replace portions of its aging sewer system such that untreated sewage would not be flowing into rivers during heavy rains.  The county issued revenue bonds (payable from system collections) for the $1.5 billion project in 1997.  The county also purchased derivative “protection” for some of the fixed rate debt.  All seemed well until the $1.5 billion project increased to $2.2 billion and the county was saddled with approximately $3 billion in debt.

By late 1997 one Republican county commissioner was raising red flags: “The financing — which refinanced floating-rate debt with fixed-rate debt, and then used the derivative to essentially convert it back to floating-rate again — left it with a higher interest cost than when it began, she said. She estimated it raised the county’s expense by some $1.2 million a year, creating alarm about cronyism, excessive fees and fraud.” [Bloomberg]  She was right to be alarmed.

When the financing began (with the ‘assistance’ of JPMorganChase) about 95% of the county’s debt was fixed rate, and by the end the percentage of floating rate (auction rate) debt was about 93% of the total.  There was cronyism aplenty:

“The bank’s fees on the swaps weren’t disclosed; rather, they were embedded in the interest rates the county paid. JPMorgan overcharged the county on the swaps to cover the cost of more than $8 million in secret payments made to friends of county commissioners who worked for local companies, a step to secure JPMorgan’s lead role, according to the SEC.”  [Bloomberg]

The commissioner’s worst fears were given tangible form when in 2007  an independent review of the fees charged reported that the $120 million in swap fees were about $100 million more than was warranted.

In the period between January and March 2008 as the country skidded into the Mortgage Meltdown the credit ratings of the two companies that insured Jefferson County’s bonds was slashed, and now without a “solid” credit rating money market funds and other investors started dumping the bonds.

The financial chaos included people going to jail for bribery and corruption charges, the county frantically trying to raise revenue, and the bankers engaged in negotiations to try to stabilize the situation.  The last two years have been a whirlwind in which the Jefferson County Commission have been trying to raise revenues — often blocked by Republicans in the state legislature — and closing down facilities in order to get the finances under some modicum of control.  [Al.com]

As of April 19, 2013 the situation still hasn’t been resolved, with a cram-down proposal — roundly criticized by creditors — on the table as the county tries to exit bankruptcy. [Al.com]

There are some important points to remember from the ongoing saga of the 658,000 people trying to figure out what’s been happening to the city of Birmingham and its surrounds.

First, this financial mess was created in so-called good financial times.  A county commission seeking to do the right thing was sold a financing scheme which fitted the revenue plans of the investment bankers but was a poor fit for long term capital projects.  The collusion of government leaders with investment bankers equated to long term losses and some rather long jail sentences.  The oldest rule in contract negotiations was ignored: If you don’t understand it, don’t sign it.

Secondly, someone forgot that the derivatives market was essentially an unregulated Wild West version of capital investment, and we can assume it wasn’t the bankers making that mistake.

Third, while revenue bonds are a common form of financing for municipal projects,  they must be repaid from generating revenue from the specific project.  True, the issuance of revenue bonds allows local governments to bypass legislated debt limits, but there has to be income to pay them off.  Fancy financing is not a substitute for INCOME.   Put more bluntly — while revenue bonds are great for toll bridges they aren’t necessarily a good way to finance larger systems such as sewer and water or other public utility services.  General obligation bonds might have been a better suggestion back in 1996.

Fourth, in an age of securitized indebtedness, remembering that one man’s debt is another man’s asset is crucial.  Complicated transactions involving the securitization of debts (public or private) are chancy deals and no amount of financial wizardry can paper over the dangers associated with market based interest rates and the impact of derivative trading.

A bit of the ham-stringing, belt tightening, misery associated with the Birmingham Debacle can be seen in the current political and economic troubles on display in Detroit, Michigan.

Motor City Meltdown

Detroit is in debt. The amount and the ways to reduce it are at issue, but the debt is still there.  It’s between roughly $10 and $12 billion.  One “turn around” firm has suggested that the only way for Detroit to survive financially is to gut public employee contracts, sell off city assets, and slash city services.  [DFP] The mayor begs to disagree, and the next round in this fight may well concern whether or not to put the city under the control of an emergency manager to — gut public employee contracts, sell off city assets, and slash city services.   Enter the Cathartes Aura Crowd.

Cathartes Aura Capitalism

There is a way to make money off misery.  Simply buy up debts and negotiate a discount above a potential selling price.  For example, one might buy up bonds for 66 cents on the dollar and renegotiate with the city for an 80 cent per dollar repayment rate.   Then there’s the corporate model Visteon example, buy up the debt, pay off the secured lenders without telling them they aren’t going to end up owning the company, and then take over.  [Bloomberg]  Whether the example is corporate or public the end game is essentially the same.   A “turn around”  is always destructive.  And, there’s been little as obviously destructive as the turn around at Hostess Brands, Inc.

Ding Dong The Deal Is Dead

The first issue in dealing with the Twinkie Defense is to take care not to defend the indefensible.  In a country with looming acknowledgement that sugar should not be the main food group, and that confections should not be a major source of nutritional input, the Twinkie and the Ding Dong were probably gone’ers.  When product sales go down there is very likely a good reason.  What is disturbing is that a combination of corporate  mis-management and union desperation created a recipe for disaster.

What we can say with some degree of confidence is that corporate management achieved that fossilized level of thinking in which profits were comprehended only in the short term — to be returned to investors — and not as revenue to be divided between long and short term company needs.  Funds the union gave up for re-tooling and renovations simply flowed back into corporate coffers to no particularly good effect except to keep stock prices elevated.  The deeper the management got into financing with investors whose eyes were focused on short term returns the less able it was to evaluate its own structure, brands, and operations.   The company finally  became a manifestation of the coriolis effect in corporate financing as it flushed itself down the porcelain.   The vultures awaited:

“Apollo Global Management and Metropoulos & Co., which made a joint offer to snap up the famous cream-filled cakes, have also entered the contest to buy Drake’s, which include Devil Dogs and Yodels, according to a source who requested anonymity because the sale process is private.” [HuffPo]

The union contracts were wiped out, the assets were sold, and the “company” split into the fragments investors were willing to buy up.

No one should have any pleasant delusions that the application of Cathartes Aura Capitalism to municipal financing won’t achieve the same purposes.   Whether the object is to “restore” financial stability or to “return” to profitability, the play book is essentially the same.  Reduce expenses (cut services, decrease employment costs), identify profit opportunities (privatize), and sell assets which will create immediate revenue.  It’s the word “immediate” that should concern us.

Creditors in the case of Jefferson County, Alabama aren’t willing to take a hair cut in the immediate future even though stabilizing the indebtedness of Birmingham’s public government is a more worthy public goal with long term benefits.

Creditors and investors in Detroit’s debt aren’t willing to wait for an uptick in the local economy predicated on the resurgence of the auto industry; they’d as soon get an immediate return on their investments.

Creditors in the Twinkies example weren’t willing to wait for, or perhaps even suggest to the management, a company reorganization in which some brands were dropped in order to focus on increasing sales in profitable divisions in the long view.

And here we have the ultimate problem with Financialism — the rigid attention to short term gains and quarterly reports which provide opportunities for immediate profits — long term development, whether it’s for a viable sewer system in Alabama, a pension plan in Michigan, or a bakery plant in Houston, are sacrificed on the altar of Immediate Profitability and Stock or Bond  Market Prices.

At least the Turkey Vultures have a slightly longer term view than our Cathartes Aura Capitalists — while the vultures can expect to live about 16 years in the wild, their Cathartes Aura cousins on Wall Street are often looking no further than the next round of quarterly reports.

Caveat Emptor: Recommended Reading on Research

If you’re feeling awash in the flood of talking points coming in waves from the Information Age — read this: Six Ways to Tell Lies From Statistics, by Betsey Stevenson and Justin Wolfers.  There’s some excellent advice in this column, and it’s in simplified language with the jargon mangled out.  Some points might be augmented with a bit more explication.

Their first point: “1. Focus on how robust a finding is, meaning that different ways of looking at the evidence point to the same conclusion.”  We find all manner of research which comes from the Million Studies of One Department.  If the results of a study can be repeated or replicated (and these are not necessarily the same thing) then the conclusions drawn are valid.  If not, then we have to ask if the original study publication jumps the gun, putting out “results” before insuring that the conclusions are replicable.   Compare this to the current flap over the austerity policy promoting Reinhart and Rogoff Study — we could look at the employment statistics from Eurozone countries, and we could see the double dip recessionary trends in their economies — but the Reinhart-Rogoff study said everything was going to be just fine because “austerity” worked.   A “robust” study conforms to other evidence, or confirms conclusions from different points of view.  Very rarely does it fly in the face of information from a variety of sources.

Their second point: “2. Data mavens often make a big deal of their results being statistically significant, which is a statement that it’s unlikely their findings simply reflect chance. Don’t confuse this with something actually mattering.”  Amen. If we toss pennies in the air the odds are heads and tails show up 50% of the time over the long run.  That’s chance.  The basic idea is summarized as follows:

“Statistical significance is a mathematical tool that is used to determine whether the outcome of an experiment is the result of a relationship between specific factors or merely the result of chance.” [WiseGeek]

It’s a tool.  What is the tool used to do?

“In a scientific study, a hypothesis is proposed, then data is collected and analyzed. The statistical analysis of the data will produce a number that is statistically significant if it falls below a certain percentage called the confidence level or level of significance. For example, if this level is set at 5 percent and the likelihood of an event is determined to be statistically significant, the researcher is 95 percent confident that the result did not happen by chance.” [WiseGeek] (emphasis added)

Where the results have more importance for policy, like the approval of an experimental drug for use by human beings, or the conclusions have public safety implications — like in food testing protocols we might want to have a 3% confidence level.  However, we need to be careful not to confuse statistical significance with social or political  significance.

For example, if I were to hypothesize that apples are better for us nutritionally than pears, and I have a whopper big sample size and perform all the right statistical tests, I may come up with a statistically significant result that the apples are the winners BUT what if the difference between the two fruits is so small as to be inconsequential in the overall human diet?   The larger conclusion (eating fresh fruit is good for us) stands, and while my study might be informative — it’s just not that informative.

Their third point: “3. Be wary of scholars using high-powered statistical techniques as a bludgeon to silence critics who are not specialists.”   Merely because someone can wield a regression analysis doesn’t mean his or her study is the Be and End All of Research.   I’d add another note of caution. Beware of jargon in general.  The column’s authors make a good point: “If the author can’t explain what they’re doing in terms you can understand, then you shouldn’t be convinced.“  If you happen to be a reasonably well educated, reasonably intelligent individual, then a reasonably well constructed study yielding reasonable results ought to be clear to you.

Their fourth point: “4. Don’t fall into the trap of thinking about an empirical finding as “right” or “wrong.”  This is especially difficult when the finding is “agreeable” or supports preconceived notions about a subject. Look, See, the Study Supports Me!  Empirical findings (results of data analysis) don’t automatically make the conclusion “right,” it simply adds an element of defensible data into the discussion.

Their fifth point: “5. Don’t mistake correlation for causation.”  Yes, oh yes, oh yes.  Some financial news pundits were quick to all but assert that high levels of government debt slowed economic growth. That statement or its inference speaks to causation, not correlation.  While debt and growth may correlate we have to ask are there other factors, not incorporated into the study and its results, driving the conclusions?   There may well be Chicken and Egg issues herein.  Is growth slow because the debt is increasing, or is the debt increasing because growth is slow already and governments are increasing debt to finance projects and employment to stabilize growth trends?

Their sixth point: “6. Always ask “so what?”  The authors of the column speak to “external usefulness,” and this is an important concept.  This concept is closely related to the questions about statistical significance.  Merely because a study shows statistical relationships doesn’t mean the study is dealing with significant issues, and because a study shows results based on a very high level of confidence doesn’t mean it has much, if any, utility for our discussions of public policy.

The authors provide a good hypothetical questions involving the use of the Reinhart-Rogoff study, centering on the reason for the increase in indebtedness.  Government profligacy or necessary expenditure for infrastructure projects?

I’d add a seventh proposition to this list: From whence comes the study?   Who is paying the piper?  The controversial “Success For All” program vacuumed up a hefty portion of educational research funding and it’s “success” was supposedly replicated all over the country.  But, wait. There was a working relationship between the research and the program, one that should have raised red flags about the independence of the research and the applicability of the results. [Pogrow]   Does anyone truly believe that the Heritage Foundation think tank will publish a study indicating that a growth based economic policy is better than cutting government spending?

On the other hand, the payment issue doesn’t’ have to necessarily be a non-starter.  Facts are facts no matter their point of origin.  It’s the methodology and the conclusions which we need to analyze carefully, not just the origin.  Once analyzed the data and conclusions have to pass that “So What?” test.

A Johns Hopkins School of Public Health Study found that: “A study of risk factors for violent death of women in the home found that women living in homes with 1 or more guns were more than 3 times more likely to be killed in their homes.” (pdf)  One side of the gun safety argument might see this as “proof” that fewer guns would make women safer in situations involving domestic violence.  Another view might argue that she should have her own arsenal readily available.   However, arguing that merely because a university sponsored the study — perhaps some ‘librul bastion’ — the finding is invalid isn’t productive. Facts are still facts.

When reading the pundits and the pontificators Disticha Moralia reminds us “Sermo datur cunctis; animi sapientia paucis.”

The Numbers Are Nice, What About The People?

7.5% unemployment sounds good.  If Nevada’s numbers follow the national trend then we’d expect another decrease in statewide unemployment, also a good thing.  However, we need to temper our enthusiasm with a nod to some other numbers which aren’t quite so reassuring.

Not all employment is created equal: “The workweek fell from 34.6 to 34.4 hours.  As a consequence the index of aggregate hours worked fell -0.4%, offsetting last months 0.4% increase.”  [AB] [BLS table B4] It’s fine to have more people working, but if they are working fewer hours then the amount of spending those families can afford doesn’t move the needle in terms of aggregate demand.

Not all wages are created equal:  There’s weakness in average hourly wages as well. Average hourly wages were $23.42 in April 2012 and a year later they’d ticked up to $23.87 — insufficient to keep up with inflation. [BLS Table B3] Leisure and hospitality wages, which are of interest to Nevadans, averaged $13.35 per hour in April 2012 and increased to an average of $13.42 as of April 2013. [TableB3] Rather an underwhelming increase.

Public Sector employment remains weakened:  For the “Drown Government in a Bath Tub” crowd this is taken as good news, but the problem is that public sector employees are also consumers and their contributions to aggregate demand are declining.  Overall employment at all levels was down 11% since March 2013.  This figure breaks down to a decline of 8% in federal employment, a 1% decline in state workers, and a 2% decrease in local government employment.  [BLS TableB1] At some point in the discussion we need to ask just how small the bathtub is supposed to be?

If we exclude radical libertarian ethereal musings about an entirely privatized system in which we all drive on toll roads the moment we leave the driveway, or all hire our own security and fire protection services, and all our schools, libraries, parks, and public health services are for-profit institutions in which you can get only what you can afford to pay for — then we need to specify which public services we expect, and what level of service is acceptable.  How long are we willing to wait for our IRS tax refund checks?  How long is an acceptable response time for police and fire calls?  How many days should the library be open?  How many children in a single classroom are acceptable?  How long should it be between health inspections in work places, medical service providers, restaurants?

Not all jobs are creating assets:  The Construction sector continues to be weak, with YOY nonfarm payroll numbers down 6%, with residential construction down 6.2% and non-residential construction off by 4.8%.  Heavy construction and civil engineering was down 3.8% since last March. [BLS TableB1]

Given the state of our nation’s infrastructure the decline in heavy construction and civil engineering projects is particularly disturbing.  The President’s Rebuild America Partnership proposal remains mired in Congressional inattention, and partisan bickering.  S. 387, a bill to establish an American infrastructure investment fund was introduced in the Senate last February, and now sits in the Senate Commerce, Science and Transportation Committee.   The website for this committee doesn’t show any hearing scheduled for this bill to date.

One of the nicer features of infrastructure investment is that it is a Win-Win proposition; engineers, contractors, and their employees get paychecks and the contracting agency gets valuable assets enhancing the unit’s overall financial position.  Senate inaction, exemplified that the body only managed to pass 2% of the bills put before it so far, isn’t helping our economy by assisting in the creation of construction sector jobs or by aiding the financing of public agency assets.

Not all jobs are full time:  Full time employment is obviously distinct from long term temporary or contracted employment.

What’s changed in the last 20 years is that there’s been an unraveling of job security in the labor market, as well as a diminishment of benefit packages and a deterioration of stable, reliable wages and promotion pathways,” said Katherine Stone, a law professor at the University of California, Los Angeles, and labor specialist. “There’s been a really fundamental shift in the nature of employment — it’s a sea change. Whether you’re talking about the expanded use of short-term employees, temporary workers, project workers, contractors or on-call workers, the use of workers who don’t have regular jobs has increased a lot.”  [CBS]

Regular, traditional long term employment, increases the inclination to secure more expensive long term assets — durable goods and housing. The employment numbers may mask a situation in which we have more people employed, but not in jobs that induce them to make personal investments in durable goods or in long term housing.  While independent contractors may, indeed, prefer project to project employment — there’s the other 50% of temporary workers who would prefer full time employment.

In April, the number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) increased by 278,000 to 7.9 million, largely offsetting a decrease in
March. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.  (See table A-8.) [BLS]

The good news from the unemployment report this month is offset by weakness in the wages and hours figures, nor is it enhanced by the acknowledgement of continued weakness in the construction sector and the inattention to our infrastructure investment needs.  Additionally, we need to carefully monitor the trends toward temporary job creation as compared to more permanent jobs created as a result of increased aggregate demand.

Congress could help.  It could, for example, take up the American Jobs Act instead of attending to a plethora of ceremonial votes to “repeal Obamacare,” and continue its “War on Women.”  The Senate could assist by scheduling hearings and giving consideration to S. 387.

If we’d like even more optimistic news on the economic front it will probably be up to American citizens to insist that our federal legislators focus on JOBS, JOBS, JOBS.

Before We Get All Sappy Happy: Housing and the Economy

Surely, there was a homeowner somewhere in the Sand State of Nevada who saw the headline about home values increasing 9.3% nationwide and smiled.  Not to be a buzz killer and turn the smile into a grimace, but there’s a catch. ” Stan Humphries, chief economist at Zillow, a real estate data provider, cautioned that the national figures are being skewed by sharp rebounds in cities hit hard during the housing bust, including Las Vegas and Phoenix. Investors are helping drive up prices in those cities.” [RGJ]

What’s the meaning of all this?  Investors skewing the prices shouldn’t be news in any commodity, and for the moment let’s think of houses as a commodity.   Who are the investors?  Perhaps they’re the ones who looked at the Local Market Monitor and decided that of 316 cities in the United States, Las Vegas was the best in “estimated returns on investment for single-family rental properties.”  [CNN] Let’s assume for the moment that no one has repealed the law of supply and demand, so a return on investment would be bolstered by having a low initial price for the commodity in question.  At this point there’s a second catch.

Getting a return on the investment in rental property means there have to be people who want to rent and they want to do so at a price which will achieve what the investor believes will be an acceptable rate of return.  As of July, 2012 rental rates across the country were up 5.2%, enough to whet the interest of potential investors.  [HuffPo] However, since all real estate investments are local, someone should have noticed that as of the middle of last year the Las Vegas rental market was the only major one not to see YOY increases in rental prices.

Investors would like to see returns of 7.5%-9.5% (after HOA fees, and taxes, are included), but there are some factors mitigating against those estimated rates of return which are so attractive to the investors.

What happens, for example, when an investment group moves into a local residential housing market and makes offers for homes about 20% over the current market price?   This strategy is fine when there is a glut of residential properties on the market and the home values have taken a real pounding, circa 2008-2010.  The strategy is not so productive when the cream has been skimmed off and properties which have been vacant for some time are still included in the supply figures, circa 2011-2013?

If markets for commodities don’t function well with uncertainty, then Las Vegas could be a poster child.   Foreclosures, a nice source of residential real estate suitable for renting, were running rampant prior to the enaction of AB 284 in the last session of the Nevada legislature.   As of 2012 foreclosure rates were down as banks swanned about trying to clean up their acts in regard to robo-signing and blatantly consumer-unfriendly practices.   The pendulum may be swinging back?   Realty Trac reports that Nevada’s foreclosure rate declined by about 14%, but the 1:320 ratio was still among the highest in the country. [VegasInc]  This might be a good sign for those “investors” if there weren’t so many gray areas in the picture.

A “No Show” doesn’t simply mean absence.  There are “no show” properties as well.  A property could be on hold (H) when there is a valid listing contract but the seller has requested a “no show” because of personal circumstances or because repairs are needed.  A property might also be subject to third party or court approval, in which case it’s “on market” but in a “back up status.”  A residence could also be pending (P) meaning that there is an offer which has been accepted but not finalized.  Then there is the following:

“Las Vegas has thousands of homes with delinquent mortgages where  home owners who have been living mortgage free in their home for more than 2 years, have no motive to short sale their severely under water homes. In a normal market threat of foreclosure would motivate these home owners to seriously market their home as Las Vegas short sales, right now Las Vegas MLS is full of no show, highly over priced short sales that are marketed just to prevent foreclosure. A good example is an agent who has put his own no-show home in Las Vegas MLS at twice the price of comparables; he knows that his home has zero chance of selling.”  [LV4us]

“In a normal market” — but this isn’t a normal commodity market.  We have investors trying to scoop up “value” in residences for speculation offering inflated bids, and sellers who are listing “no shows” without much intent to sell, combined with the prospect of another surge in properties listed as the bankers go for another round of foreclosures.

Timing is everything and nothing.  Or, as Warren Buffett once opined: “We continue to make more money when snoring than when active.” [CBS]  Is an investor likely to see those 7.5% to 9.5% returns if he’s timed his entry into the Las Vegas residential real estate market just as the “big players” have inflated prices and skewed the numbers?  Will the investor see those returns if she has entered the market when the number of short sales increases, and the value of her newly acquired “assets” trends down making the purchase price look good but the assets counted in the total value of the investment look a bit grimmer?    By how much would interest rates have to increase to turn a bargain into an unsalable elephant weighing down the finance planning?

Let’s guess for the moment that the private equity behemoth Blackstone Group is one of the major players in the Las Vegas real estate game.

“The firm has also invested in Northern California. Statewide, Blackstone has poured close to $740 million into California real estate through January, according to DataQuick figures. Nationally, the firm has invested in seven other regions: Atlanta, Phoenix, Charlotte, Seattle, Las Vegas, Chicago and multiple cities in Florida.” [LAT]

And, further let’s review the part in which they have a very financialist version of a business plan for all this activity.

“These firms are also exploring ways of packaging rental income streams into securities, similar to the way mortgages were bundled during the boom years. Those mortgage bonds — often packed with risky home loans that produced mass defaults — turned into the toxic assets that helped bring down major banks during the financial crisis.” [LAT]

What is contorting the Las Vegas real estate market? Why are the prices skewed?

There’s “packaging rental income streams into securities.”  Instead of packaging the mortgages of single family homes into a “revenue stream,” they’re packing rental agreements.  An assortment of 1,000 rental agreements are packaged up as a bond.  Some are very good agreements, others are to people who may vanish with stealth comparable to the Irsays moving the Colts out of Baltimore.  The “value” of the bonds depends upon the quality of the rental agreements included in it.  How does a potential investor in the bonds know the value of the package?  Does fiduciary responsibility require the investor to examine each of the rental agreements or — in a wrenching reminder of days not so long by — does the bond investor rely on the rating agencies to stamp AAAAAAA’s on the paper?

Does the bond investor repeat history by repackaging the bonds, and by creating derivatives?  Will we see a repetition of the CDO quadrupled game as played by Wall Street firms who invest in both sides of the residential rental property market?  That a major private equity firm is willing to risk a repetition of the mortgage market mess created as of 2008 by creating a rental agreement mess culminating in a lovely crash in the not-so-far future seems prima facie evidence of how little Wall Street learned from its most recent escapades.

I’d like to smile about the return of value to Las Vegas homeowners, but the uncertainty in the residential real estate market, the machinations of the private equity crowd and some bankers who have the Bourbon-esque capacity to never forget and never learn, and the prospect of boiling yet another Securitization Stew, makes me want to grimace.

Branding Women

That GOP rebranding effort is made all the more difficult by Republicans at various levels of government who are getting in their own way.  The problems are visible in economic issues, as well as social ones.

Home Economics

H.R. 377, the Paycheck Fairness Act, is currently stalled in the House Committee on Education and the Workforce, and there’s a discharge petition to blast it back into consideration on the House Floor.  Representative Dina Titus (D-NV1) and Representative Steven Horsford (D-NV4) have signed the petition, as have another 191 members of Congress as of Thursday, April 25, 2013.  Noticeably absent are the signatures of Nevada Representatives Heck and Amodei, both Republicans.

The bill simply states that wage rate differentials are to be based on experience, education, and training — not merely on gender.  It also provides for collecting statistics on employment and the publication of the data.   The part which usually causes groans, moans, and predictable grimaces from Republicans might be:

Revises the prohibition against employer retaliation for employee complaints. Prohibits retaliation for inquiring about, discussing, or disclosing the wages of the employee or another employee in response to a complaint or charge, or in furtherance of a sex discrimination investigation, proceeding, hearing, or action, or an investigation conducted by the employer.

Makes employers who violate sex discrimination prohibitions liable in a civil action for either compensatory or (except for the federal government) punitive damages.  [CRS]

The standard GOP response to these kinds of provisions is (1) The Trial Lawyers are Coming, The Trial Lawyers are Coming; and, (2) Onerous Government Infringements on Your Liberty! Your Freedom! Both are nonsense.

The problem isn’t anything new; consider this from 2010:

Women earned less than men in all 20 industries and 25 occupation groups surveyed by the Census Bureau in 2007 — even in fields in which their numbers are overwhelming. Female secretaries, for instance, earn just 83.4% as much as male ones.

This has economic implications for 50.8% of the American population, or 49.5% of the Nevada population — women.  It also has evident connections to Nevada’s median household income ($55,553) in which the female’s contribution to household revenue is, on average, worth about 75 cents of every dollar contributed by the male partner.   IF members of the Republican Party are serious about improving the micro-economics of the average Nevada home, then insuring pay equity would be a good place to start.  The Discharge Petition needs 218 signatures to reach the floor — the ‘John Hancocks’ of Congressmen Heck and Amodei would be helpful.

Home Not-S0-Sweet-Home

Under the convenient rhetoric of “Liberty” and “Big Government,” lie some inconvenient attitudes on display from various levels of Republican leadership.

It’s Big Government if gender pay equity solutions are under discussion. However, it’s perfectly acceptable to allow government intrusion into private family decisions like contraception and birth control.  Heaven Forefend, a family should debate abortion options in private!   The Republican Party seems to have no problems at all when it comes to calling in the Big Government to prohibit abortion procedures.

Senator Rand Paul (R-KY) introduced a Fetal Personhood Bill, S. 583, on March 14, 2013, under the terms of which a fetus would have 14th Amendment rights.  As noted previously, could a fetus decide that the economic circumstances of the family to which it was about to be born were insufficient for its grand plans and sue for emancipation?  Personally, I would like to see a fetus challenge Citizens United.

Anti-Choice bills have also been introduced by Representative Diane Black (R-TN) HR 940 and HR 217;  by Representative Trent Franks (R-AZ) HR 447;  Representative Ileana Ros-Lehtinen (R-FL) HR 732; Representative Marsha Blackburn (R-TN) HR 61; Representative Jim Jordan (R-OH) HR 1091; Senator David Vitter (R-LA) S. 138;  Rep. Randy Neugebauer (R-TX) HR 1122;  Rep. Paul Broun (R-GA) HR 23; Sen. Thomas Coburn (R-OK) S. 154; Sen. Mike Johanns (R-NE) S. 356;  and the list goes on.

Anyone operating on the comforting delusion that the newly formed 113th Congress will be less focused on anti-choice legislation and more intent on JOBS and bills to improve the economic situation of American families will be sorely disappointed.

The GOP still hasn’t quite found its footing on Women’s Issues.  Perhaps this could be because it hasn’t quieted those voices within it ranks for whom women are variously mobile wombs, ranting radicals, or irresponsible sows at the public trough.

Leading GOP spokesperson Rush Limbaugh’s memorable misogynistic rants in regard to Sandra Fluke’s testimony on behalf of women who need contraceptive medication to avoid complications of ovarian disorders are echoed by an Albuquerque Republican who called a minimum wage increase advocate “names” on social media — and who later said (a lá Limbaugh) he was “just joking.” [ABJ] [TP]

Opposed to sexual violence, and want to “Take Back The Night?” Then expect some moron, such as the notable example in Arizona, who preaches that “Women Are Asking For It.” [TP] At Dartmouth sexual assault protesters were threatened with rape.  [TP] Or, call for police assistance too often to report domestic violence?  You could be facing a police department pressuring your landlord to evict you.  [TP]  Had enough of hearing about Steubenville, OH? There’s a new example from Michigan. [TP]  There’s a thread running through all these unfortunate incidents.

Women are undeserving of full consideration as human beings.  They are responsible for the exercise of male transgressions.  They are prey for the predators and it’s the woman’s fault if…if almost anything.  It’s a woman’s fault if a man is unsatisfied…in nearly all realms of human endeavor.   Can’t establish a meaningful long term relationship with the fair sex? Blame the Femi-Nazis?  Can’t get and hold a job? Blame the radical feminists for demanding employment?  Can’t understand the point a person is making about medical conditions or employment situations?  Call names! Like, “Radical Bitch.”  Want a simplistic solution to the complex personal issues involved in family planning? Just rail about abortion.

So long as Congress turns its attention to abortion more often than it does to women’s health, as long as radio ranters validate the misogyny of the disgruntled, so long as corporate interests can insert their anti-labor message into the parlance of economic discussions of wage rate equity — we will have trouble addressing the problems facing American families.  The GOP is still branding women, instead of rebranding their own party.