B and B

Lilly Ledbetter Fair Pay Restoration Act

Here is a bill I've been keeping a close eye on for nearly a year:

Under a measure sponsored by Senator Edward M. Kennedy, Democrat of Massachusetts, the court’s ruling that Ms. [Lilly] Ledbetter [of Alabama] failed to file a timely challenge to pay practices at a Goodyear Tire and Rubber Co. plant in Gadsden would effectively be overturned, though Ms. Ledbetter would not benefit directly.

Ms. Ledbetter, who earned thousands of dollars less than male colleagues doing similar supervisory work, was found by the court to have failed to make her claim within 180 days of the company’s pay policy decision. The sponsors of the bill want to clear up that requirement and straighten out what they see as a flawed ruling.

“Never mind that Ms. Ledbetter didn’t know about the discrimination when it first began,” Mr. Kennedy said. “Never mind that she had no means to learn of the discrimination because Goodyear kept salary information confidential. Never mind that Goodyear’s discrimination against Ms. Ledbetter continued each and every time it gave her a smaller paycheck than it gave her male colleagues.”

The House passed a similar bill last year soon after the court decision, but its backers have encountered resistance in the Senate and from the Bush administration, which argues it could spark a wave of lawsuits. Some Senate Republicans have reservations about the measure, but they intend to be careful in their opposition to avoid being portrayed as backing pay discrimination.

New corporate giveaway under guise of "fixing" the mortgage crisis

I am of mixed opinions of how or even whether to assist people and banks that got involved in the overinflated housing market over the last few years.  But one thing I am clear about is that giving out billions of dollars of taxpayers' money to the housing industry that reaped in mega-profits during those years is profoundly wrong.

Daniel Gross wrote in Slate last Monday (emphasis added):

The proposed tax break [now passed by the Senate] is hard to justify for several reasons. It does nothing for slow and steady companies that keep their heads and simply rack up profits year after year—and pay their taxes accordingly. Rather, it rewards the most reckless participants in the bubble. If you borrowed a ton of money to build spec houses in Miami and reported $2 billion in profits between 2002 and 2007 but gave up all those profits by notching a $2 billion loss this year, the extended carryback has a great deal of value. If you've been building affordable housing in Wichita, Kan., and booked $300 million in profits in those years, and then, through careful management of costs, managed to eke out a $5 million profit this year, it has no value. The big public homebuilders, whose shares rallied on the news of this potential tax break, didn't pay any windfall taxes on the bubble-era earnings. Why should they get an extraordinary post-bubble windfall?

Homebuilders argue that they need relief because their sector, which provides a great deal of domestic employment, is on the ropes, and they're finding it more difficult to raise capital. Which is as it should be. After bubbles pop, those who screwed up really badly fail and get taken over by creditors or opportunistic investors. Those who have sound underlying franchises but merely got a little carried away can survive if they take painful restructuring moves. This is what is known as market capitalism. For all the talk of a credit crunch, capital is still available—it's just not available on the easy terms managers had come to expect during the late Greenspan years. Citigroup, Merrill Lynch, and plenty of other firms tied to the mortgage/finance complex have taken steps to shore up their balance sheets and replenish lost capital. But investors, having been burned, demand more downside protection and better guaranteed returns. Thornburg Mortgage was forced to pay 18 percent interest for an emergency round of capital raising that allowed it to stave off bankruptcy. This is also what is known as market capitalism.

...

The proposal to give new tax breaks to homebuilders and banks is yet another example of the pernicious trend of privatizing profit and socializing losses, which is gnawing away at faith in the system. Dilute the shareholders, not the taxpayers.

Thankfully, the House of Representatives may take a far more sensible route, according to the Washington Post (emphasis added):

On Wednesday, the House Ways and Means Committee approved an $11 billion tax package that rejects help for home builders and offers a $7,500 tax credit to first-time home buyers rather than buyers of foreclosed properties.

Please keep paying attention so that we all do not get swindled in the end.

Don't ignore the effects of gender bias

The San Antonio Express-News published a letter of mine today, in response to this article from last Sunday's paper.  The article focused on women re-entering the workforce after taking several years off the care for their kids.  For my letter, they used a title "Show both sides," but a better title would be "Don't ignore the effects of gender bias."  Here is the letter:

I am writing to comment on the article by Melissa Fletcher Stoeltje, "Opting Back In."

I applaud the Express-News for taking on such a complex subject, but I was disappointed the author did not discuss the crucial role gender bias has on the work-related choices that families face.

The phrases "opting in" and "opting out" imply free choice, yet the reality for many women who enter or leave the workforce has nothing to do with choice. For the majority of families, simple economics dictates that the parent who can make the most money works and, if possible, the other parent stays home and takes care of the children.

Since, on average, women earn only about eighty cents for every dollar a man earns, most of the parents who "opt out" are women. If the tables were turned, we would be talking about men "opting out" rather than women.

Also, the article overplays a small number of positive stories of women who have succeeded at returning to the workforce, while downplaying a "rigorous survey" that suggests the reality for those who pursue this course is far less encouraging: only three-quarters of highly-qualified women who desire to return to work actually succeed, and less than half at a full-time job.

The author should have devoted much more attention to this other side of the story. Why can't these women find work appropriate for their skills?

Isn't it far more newsworthy when qualified people cannot find appropriate work?

While it may feel better in the short run to ignore the ongoing realities of gender discrimination in the workplace, it does not serve your readers well to give short shrift to this crucial factor affecting the choices of women and their families.

What to think about the $550m San Antonio bond program?

Our city government is looking to get a large bond measure approved by the city's voters later this spring (May 12), and the campaign to do so is apparently kicking off:

With a large group of political, business and civic heavy hitters behind him, Mayor Phil Hardberger officially launched a campaign Friday to sell voters on the city's $550 million bond issue.

Hardberger said the bond package, the city's largest, is about rebuilding the city's basic infrastructure and laying a foundation for future growth and economic prosperity through 151 public improvement projects throughout San Antonio.

"The problems will get worse and the costs will go up if we don't do something now," he said. "We move and we move now — that's what the bond is all about."

...

Four 32-member citizen panels spent two months vetting the projects that will be presented to voters in five categories.

I'm not yet sure exactly what to think of this.  On the surface, it sounds like an excellent idea to ensure that our city's infrastructure is enhanced and maintained.  But with so much money and so many projects involved and without an independent assessment from reliable organizations, a lot comes down to trust.  Do we trust our city's leaders to have put together a set of worthwhile initiatives and not sneak in local versions of the "pork" that Congress is so well-known for.  Do we trust that all of these projects are wise and encourage responsible growth, not the landscape-destroying sprawl that we already have way too much of?

To get more information on all the projects involved, and other aspects of the bond program, see www.sanantonio.gov/2007bond.

Bringing the San Antonio Riverwalk into the 21st century

Extending and improving our city's famous Riverwalk has been talked about for many years, and the project has always appeared to me to be a priority of our civic leaders.  Lack of money has stood in the way.  Now, the campaign to get this done appears to be ramping up.  From today's Express-News:

It takes money to make money.

That's the idea behind a new study that says the $198 million San Antonio River Improvements Project, once completed, could have an annual economic impact of almost $1 billion on the region's economy.

The study by TXP Inc. was commissioned by the San Antonio River Foundation, which will use it to bolster a campaign to raise an additional $50 million from the private sector to fund public art and other amenities for a 13-mile linear park along the San Antonio River.

The report suggested the completed park, running from the Witte Museum to Mission Espada, would add $12.5 million annually to the area's tax base, increase property values adjacent to the open space along the river, and create close to 10,000 permanent jobs.

...

While the city, county and Zachry search for middle ground that would allow construction to begin, County Judge Nelson Wolff said that regardless of the increasing costs, the river project is "the most important public project we have going right now, and we have to push forward."

While I wouldn't take the word of this study, commissioned as it is by an interested party, I have little doubt that its fundamental conclusion is correct. 

Reading this first part of the article, I started thinking about my hometown Chicago's Millenium Park as a recent example of how an extensive improvement to a city's public space can be a tremendous boon to a city and its residents, despite the high up-front cost.  If only we here in San Antonio could follow that example with even a fraction of that success.  Apparently I wasn't the only one with those thoughts, as the article continues:

Sonny Collins, the river foundation's president, compared the improvements project with Chicago's Millennium Park, which has seen the value of surrounding land increase $1.4 billion, with increased tourism expected to bring in another $2.6 billion over the next decade.

That success will allow Chicago to pay off $285 million in bonds it issued to help pay for the park three to five years early, Collins said.

"The numbers are mind-boggling," he said. "We'd love to think we could emulate that."

The river foundation's job now is to emulate the successful private-giving campaign Chicago initiated to complement the public money spent on the park. Chicago raised $235 million for public art and other amenities within Millennium Park. Private money for the river project will go for enhanced landscaping, overlooks and public art.

Will San Antonio's corporate citizens do their part?

To see what is envisioned for the long neglected parts of our city's namesake river, see the San Antonio River Improvements Project website, where the illustrations accompanying this post came from. 

This is an idea I've been excited about ever since first hearing about it years ago.  This plan follows the century-old advice of legendary city planner Daniel Burnham (to throw in another Chicago reference):  "Make no little plans. They have no magic to stir men's blood and probably will not themselves be realized."   It would be great to see this "no little" urban river plan begin to come to fruition sometime in the near future.   

San Antonio in the race for 'Tax Capital of America'?

In the Express-News today, Roddy Stinson, a local columnist who loves to hate the San Antonio city government, points to a study by New York City's Independent Budget Office.  The study compares the tax rates in the nation's big cities, and Stinson uses it to suggest that San Antonio's tax rate is abnormally high—the headline on his column is "'Tax Capital of America' race, New York City 1st, Alamo City 4th."  He then offers an anecdote about property taxes allegedly scaring off one person from moving here from Florida.

What Stinson doesn't explicitly mention about this study is that in only included nine cities—those with over a million people. 4th out of nine is rather middle-of-the-pack. Ok, it's still above the median (by one slot), but also unsaid is that state taxes make up 49% of San Antonio's share. 

I should not pick on Stinson too much here because he does raise some good points later in the column:

As I write this column, a legislative group led by a Texas Democrat, San Antonio State Rep. Mike Villarreal, continues its effort to push/pull through the Legislature a bill that would mandate disclosure of property sale prices and thereby move the state and this community toward fair valuations and equitable taxation.

Villarreal and other champions of the middle class made a similar effort in 2005. But they were thwarted by Republican House Speaker Tom Craddick and his middle-class-mauling, wealthy-class-favoring, big-business-hugging GOP henchmen.

(Greatest political mystery of 2007: Why do grass-roots Republicans continue to be silent as church mice on this issue?)

It is nice to see Stinson finally turning some of his ire on the GOP and the GOP-led state government, who so richly deserve it.

A roofing racket

Via Knight Ridder and the Miami Herald, here is example of the Bush administration's stellar management of taxpayer money:

NEW ORLEANS - Across the hurricane-ravaged Gulf Coast, thousands upon thousands of blue tarps are being nailed to wind-damaged roofs, a visible sign of government assistance.

...

It isn't coming cheaply. Knight Ridder has found that a lack of oversight, generous contracting deals and poor planning mean that government agencies are shelling out as much as 10 times what the temporary fix would normally cost.

The government is paying contractors an average of $2,480 for less than two hours of work to cover each damaged roof -- even though it's also giving them endless supplies of blue sheeting for free.

''It sounds to me like these people are probably making a stinking killing,'' said Mike Lowery, an estimator with Pioneer Roof Systems in Austin.

...

In normal circumstances, Lowery said, his company would charge $300 to tarp a 2,000-square-foot roof in Austin. For that same size job, the government is paying $2,980 to $3,500, or about 10 times as much, plus additional administrative fees that can't be readily calculated.

''It's hard to imagine somebody asking that kind of money,'' Lowery said. ``It sure seems to me like somebody is getting taken advantage [of].''

...

Former government contract officials and private contracting experts charge that the Army Corps neglected to negotiate better rates when it had the chance before the hurricane season began. Once the storm hit and the vast amount of destruction became obvious, they say, the Corps failed to negotiate a lower rate for contractors, who could still make decent profits because of the sheer amount of work to be done.

Taylor of the Army Corps said the Shaw contract was one of many advance deals signed in July after the government was criticized for signing lucrative deals on the fly after hurricanes ravaged Florida last year.

But the advance deal the Corps negotiated with Shaw was for the same $1.75 per square foot rate that it was criticized for last year.

Meanwhile, while the federal government's preferred contractors make a "stinking killing," the city of New Orleans, desperate and needing all the help it can get to get back on its feet, can't afford to pay its staff:

NEW ORLEANS, Oct. 4 - The mayor of this embattled city said today that there were not enough funds to meet the municipal payroll and that about half the 6,000 public employees in the workforce would have to be laid off.

...

The mayor said that the city had checked with federal and state sources of funds, local banks and other financial institutions, but that the city was unable to maintain staffing at current levels. He said that the payroll amounted to about $20 million a month, and that the cuts would save about $5 million to $8 million.

...

Governor Blanco wants the federal government to help by amending the Stafford Act to allow funds to flow to pay public employees' regular salaries, and not just emergency-related overtime.

What is wrong with this picture?

John Edwards' new gig

Certain readers (at least I hope they are readers) were wondering what former Senator, and recent Vice-Presidential candidate, John Edwards is doing these days.  Well, here is the answer, direct from the man himself, guest-blogging this week over at Josh Marshall's brand new community blog, TPMCafe:

As many of you may already know, I am directing the new Center on Work, Poverty, and Opportunity at the University of North Carolina at Chapel Hill.   At the Center, we’re focusing on the issues that face the 36 million Americans who are struggling with poverty every day, and working to examine innovative and practical ideas for moving more Americans out of poverty and into the middle class.

His first post is about a recent study from the Brookings Institution that reveals that low-income families actually pay more for the same services than do high-income families.

Also, here is the link to the Center on Work, Poverty, and Opportunity.  At that site, Edwards spells out its mission:

The Center brings the best minds in the country together with some of America's best and brightest young people. We do not pretend to have all the answers, but I can promise you that we will ask the hard questions:

• How can we restore the promise of America for those living in poverty?
• How can we combat poverty in a way that also honors our core beliefs in hard work, responsibility and family?
• How can we find ways to build more homes and fewer shelters, more small businesses and fewer minimum wage jobs?
• How can we find a way for government and charities and religious groups to work as more effective partners and honor America's traditions?

It may seem like an impossible goal to end poverty, but that's what the skeptics said about all of the other great challenges we've faced as a nation. If we can put a man on the moon, conquer polio, and put libraries of information on a chip, we can end poverty for those who want to work for a better life.

Criminal corporations or criminal individuals?

Today, the Supreme Court unanimously threw out the three-year old conviction of the Arthur Andersen accounting firm for destroying documents relating to the infamous Enron case.

The decision was a major defeat for the Department of Justice, which prosecuted one of the nation's largest accounting firms against the advice of numerous critics, who believed the case too weak for criminal trial.

The Andersen firm itself all but disintegrated. Many Andersen accountants and support staffers scattered to rival companies after Andersen's criminal conviction. Today, only about 200 employees perform administrative and legal duties for Andersen, which exists mainly to fight shareholder lawsuits related to its work for Enron, Global Crossing Ltd. and other clients.

This reminds me of a central paradox of this case that I was curious about several years ago.  How can an entity like a corporation be guilty of criminal behavior?  Common sense indicates to me that only people can be guilty of criminal behavior.  After all, you can't send a corporation to jail for 10 years.  The appropriate venue for punishment of illegal organizational behavior would be civil litigation—as well as criminal cases against the individuals involved.

So who at Arthur Andersen was responsible for their shady practices?  No doubt many of those who were are now working at different companies—companies that have not been charged with criminal behavior.

Have any individuals been brought to justice in the Arthur Andersen case? 

Good Jobs First

Recently, the owner of the NFL's New Orleans Saints hinted that he may be interested in moving his team, perhaps to San Antonio.  (Fellow San Antonio bloggers Cincinnatus and Cicero have covered this issue recently.)  To sports watchers, this is part of an old story:  team owner hints he may move team; city and taxpayers where team is currently located cough up huge amounts of dough to build or renovate a new stadium or otherwise provide a tremendous windfall to the aforementioned team owner.  If the dough is not forthcoming, other cities fall over themselves to offer said owner the windfall he seeks; original city loses team. 

The same game is played, less visibly but even more expensively to taxpayers, by other large businesses seeking government handouts.  Carlos Guerra, columnist for the San Antonio Express-News, wrote yesterday about a recent case in North Carolina:

[T]wo days after the November election, [North Carolina Institute for Constitutional Law founder Robert] Orr says, the Legislature was rushed into special session and quickly approved a $240 million incentives deal for an unnamed recipient.

"When the legislation was discussed — it wasn't really debated — Dell was rumored to be the company, and 10 days later, (Dell's) CEO and the governor announced that Dell was coming," Orr says with a slight grimace. "Dell then proceeded to play off two counties against each other and received in excess of $37 million more."

The total is now almost $300 million, he says, "for the creation of some 1,600 jobs, virtually all of which will pay $28,000 or less."

Doing the math, this amounts to a subsidy of $187,500 per job!  Certainly taxpayers should be able to get more for that amount of money than a low paying job.  One answer to this problem, according to Robert Orr, whose organization is suing the state of North Carolina over this giveaway, is for Congress to act.

"The ideal solution is for the U.S. Congress to step up to the plate and say, 'Under the power of the commerce clause of the U.S. Constitution, we're going to legislatively prohibit states from directly subsidizing companies as an inducement to get them to move or to keep them from moving.'"

Of course, with the kings and queens of corporate handouts —the GOP, Bushies, and DeLayicans—running the show in D.C., we can't expect any help along this angle in the immediate future.

So meanwhile, an organization called Good Jobs First is working on getting localities to start requiring more from the companies that they subsidize.  Benefit-less low-paying jobs will not suffice.  And they apparently are having at least some success, as Carlos Guerra wrote about last week:

Reports of reversals in the Maryland Legislature that will require "big box" retailers to pay some of their "associates' " health insurance costs and of new conditions being placed on tax breaks elicited cheers at the second national Good Jobs First conference [in Baltimore].

Attending the conclave are some 400 community, labor, environmental, civil rights and tax-watch group representatives from 38 states.

Once a project of the Institute for Tax and Economic Policy, Good Jobs First has forged an unusually diverse coalition of groups into a growing national movement whose adherents research tax and economic development issues and cook up strategies to bring publicly funded incentives programs under citizen control. They also work to stop publicly funded business incentives that don't advance the public good in a demonstrable way or that shift the tax burden from big businesses to average taxpayers.

Among those presenting workshops is author Don Chen of Smart Growth America, which he says promotes "development that benefits economics, is fiscally sensible and prudent, improves the environment and makes opportunities available to more Americans."

"On many fights against (government-fueled) sprawl, we have also seen fiscal conservatives — Republicans — joining with environmentalists, social justice groups, people who care about affordable housing to advocate against sprawl development and support smart growth because they have common ground on how development occurs," Chen said.

A late 2003 survey from Good Jobs First showed that nearly 100 jurisdictions across the country "now apply job quality standards to companies that receive economic development subsidies."  A very small number in an absolute sense, but the trend, at least, is good one.

“Denying taxpayer subsidies for poverty wages is truly an idea whose time has come,” said GJF Executive Director Greg LeRoy. “A decade ago, only a few jurisdictions had wage rules. Now they're becoming standard practice.”

This is an effort that clearly deserves more attention, especially here in Texas, so I am glad to see Guerra writing about it in the Express-News.

UPDATE:  Added links to posts at The Jeffersonian (Cincinnatus) and San Antonio Elections 2005 (Cicero) in the opening paragraph.