If the middle class could give your Congressmember a grade, what would it be?  Today, DMI releases grades for every senator and representative, evaluating their votes on key legislation that affects the current and aspiring middle class.

2007 began as a year of great promise. Congress was flooded with dozens of new members, many elected with a pledge to address the middle-class squeeze and help more working people attain a middle-class standard of living. Important legislation--from expanding children's health coverage to bringing down the cost of college loans--was introduced and brought to a vote. But, faced with Senate filibusters and a recalcitrant President, many bills died or were passed in watered-down form. Still, the bills that did become law represent concrete gains for current and aspiring middle-class Americans, including a higher minimum wage, expanded Pell Grants, a freeze on middle class tax hikes and lower costs to fuel cars.

Memo
TO:    The Netroots
FROM:     Elana Levin, The Drum Major Institute for Public Policy
RE:    Immigration and the blogosphere

The problem:
America's current immigration policy is clearly unacceptable to the general public, immigrant rights activists, immigration opponents and organized labor. Even corporations are dissatisfied with the status quo, even if for their own profit-driven reasons. There is a consensus that reform is needed but there is no consensus on what that reform should look like. At the same time, the status quo of maximum noise with minimum action is a political strategy for a certain segment of the organized right wing. The netroots can play a critical role on this issue by facilitating a conversation that will lead to increased political will for a progressive immigration policy that will benefit America's squeezed middle class and all those struggling to become middle class.

Dream with me for a minute. Imagine that we-the-people could easily find out how our members of Congress voted on the bills that are most important to us. Imagine that there was a place that explained clearly and simply how those votes really impact America's current and aspiring middle class.
And, while we're dreaming, imagine that Congress knew that Americans of all walks of life could keep an eye on them, comparing their rhetoric in favor of strengthening and expanding the middle class with their votes.  

Wake up and smell the Web 2.0 glory.

(by the Drum Major Institute's Andrea Batista Schlesinger)
Lou Dobbs is at it again. His target this time? Governor Eliot Spitzer and his plan to provide drivers licenses to New Yorkers regardless of their citizenship.

       In developing your own opinion on the Governor's proposal consider this:  If, like Lou Dobbs, you believe political pandering that exploits fear should be used to stall a much-needed conversation about immigration policy, you should join his knee-jerk opposition to Governor Spitzer's plan.  But if you want a common-sense approach that follows the lead of eight other states and would make New York's people and streets safer, go with the Governor.

       Washington's failure to achieve consensus on an immigration bill should not obscure the fact that commonsense immigration laws have strong majority support. Americans believe it is neither feasible nor desirable to deport the 12 million undocumented immigrants currently here. Instead, there is consensus in favor of providing a path to citizenship for immigrants of all kinds who learn English, work hard, and participate in the American system.  Unfortunately, the anti-immigrant sentiment fostered by Dobbs and his ilk kept Washington from pursuing it.

     

Everyone remembers former Governor of New York Mario Cuomo's famed speech at the 1984 Democratic Convention. Even me (and I was 5).  In it he said:  "President Reagan told us from the very beginning that he believed in a kind of social Darwinism. Survival of the fittest. `Government can't do everything,' we were told, so it should settle for taking care of the strong and hope that economic ambition and charity will do the rest. Make the rich richer, and what falls from the table will be enough for the middle class and those who are trying desperately to work their way into the middle class." The speech could have just as easily been delivered in 2007 as 1984. So as the country plunges into another Presidential election cycle, Governor Cuomo, a practitioner and one of the left's most eloquent voices, once again asks to candidates to step back and examine their governing philosophy and the challenges the country faces, arguing that pat answers and rhetoric are insufficient to address them.

(this post by DMIBlog's Amy Traub) It's just terrible luck. In the last few years, our nation's wise and farsighted public policies have been continually undermined by random events that no one could in any way have foreseen or prepared for.

"I don't think anyone could have anticipated the sectarian violence."

"I don't think anybody anticipated the breach of the levees."

And most recently, Angelo R. Mozilo, CEO of the nation's largest mortgage lending company, on the ongoing collapse of the housing bubble: "Nobody saw this coming."

Of course, in all of these cases, many people not only foresaw the potential for disaster, but made practical suggestions for averting it. Policymakers simply didn't choose to listen. Which leads us to the question of what we might be missing right now, and what we could be doing about it.

Dean Baker, co-director of the Center for Economic Policy Research, is one of those people who saw the bursting of the housing bubble coming years ago  and had some ideas about how to mitigate the damage. While many mainstream pundits and analysts are still speaking hopefully of a "soft landing" for housing markets, Baker sees a recession looming, possibly a severe one.  

In a report released in August,  Baker notes that residential construction alone accounts for about 5% of the U.S. economy. Then we have consumer spending, partially fueled in recent years by people borrowing against the value of their homes to sustain a higher standard of living than they could otherwise afford. State and local governments will be harmed by the loss of property tax revenue. Not to mention the vast majority of American homeowners, whose house is by far their most valuable asset, and who planned their retirement based on the widespread assumption that it would hold its value.

Because the fundamental problem is that housing prices are overvalued, Baker notes, it is inevitable the that problems in the sub-prime mortgage sector will spread into the rest of the housing market.

That brings us to what we can do about it. The bad news is that there's no way to stop the bubble from bursting. Overvalued housing prices must come down to earth eventually. From the point of view of home owners and prospective buyers, it's better to get the correction over as quickly as possible. From the perspective of the economy as a whole, it's best if it deflates gradually. But in the meantime, Baker has a proposal for making sure that at least people entrapped by predatory mortgages don't get thrown out of their homes.  It would save neighborhoods from the blight of widespread foreclosures and it doesn't involve bailing out the banks that made irresponsible loans to begin with.

Of course, it's possible that we've seen the worst already and actually have nothing more to worry about when it comes to the housing sector. After all, President Bush is confident that the problems are "modest" and "America's overall economy will remain strong enough to weather any turbulence." Perhaps he doesn't know anyone who could anticipate things getting worse.

This was written by Amy Traub, and cross-posted from DMIBlog.

If you believe the polls, Democrats are reasonably pleased with the field of presidential hopefuls vying for their 2008 vote. Republicans, on the other hand, are dissatisfied, hoping someone better comes along. So far that "someone better" has been described in terms of the perfect family-values conservative, with no hint of ambiguity or past policy shifts on abortion or gay rights.  

But Seth Michaels at the AFL-CIO blog points out that there's another critical dimension where the GOP candidates fail to match up with rank-and-file Republican voters: economic issues that matter to working people.

Recall the poll conducted earlier this year by the Pew Center for People and the Press, which showed, among other things, that 58% of Republicans agreed that "government should take care of people who can't care for themselves." Nearly seven out of ten Republicans favored raising the minimum wage. 63% of Republicans say major corporations are too powerful, and half believe corporations fail to strike the right balance between profit and the public interest. 65% of Republicans insist that stricter laws and regulations are needed to protect the environment. More than half agree that labor unions are necessary to protect working people. Another poll found that half of Republicans think universal health care coverage should be a guaranteed right of every American.

Michaels suggests that former Arkansas Governor Mike Huckabee, fresh off a second-place finish in the Iowa Straw Poll, could further distinguish himself from the GOP pack by speaking out on these issues. He notes that the candidate called for his party to "quit being a wholly-owned subsidiary of Wall Street and corporations" and acted to raise the state's minimum wage and authorize a health care program for poor children in Arkansas. As Michaels discusses, Huckabee still leaves a lot to be desired when it comes to working families issues, but at least he has the potential to pull the Republican economic discussion away from the right wing fringe, where it has been mired for far too long. That in turn, could make bread-and-butter economic issues more salient for Republican voters, leading more Americans to agree that the election should be "about" something like the crying need for a better health care system, as opposed to, say, whether people ought to be allowed to burn the flag.

So one cheer for Mike Huckabee, and the potential to shift our national political debate in a more productive direction. Watch this space on the DMI blog for Elizabeth Hartline Green's take on Huckabee's stance on education issues. We'll see if he earns another cheer.  

(by Amy Traub of DMIblog) It must be pretty nice to be taxed like a hedge fund manager. Despite the many millions you are compensated, most of your income isn't taxed at the 35% rate, like ordinary income for the top tax bracket.  Unlike your highly-paid colleagues in other industries, a nifty IRS loophole allows you to pay just 15% in taxes on much of your compensation. On paper, it works because a big chunk of your pay is considered capital gains, not ordinary income. The real world effect is that you get taxed at a similar rate as the guy who makes your morning latte.

The Economic Policy Institute estimates  that $6.3 billion in tax revenue is lost every year by providing hedge funds with privileged tax status, with an equivalent amount lost annually by providing these tax benefits to private equity mangers.  

For a federal government stretched at the seams, trying to foot the bill for two wars, increased homeland security, veterans' health care,  health coverage for poor kids, crumbling national infrastructure,  investments in renewable energy, efforts to make college more affordable,  or just making the tax code more fair to middle-class Americans you'd think ending the low-tax loophole for billionaires would be high on the list of new revenue sources. And you'd be right.