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Hey Main Street, Meet Your Wall Street Landlords

by Brian T. Lynch, MSW

If you lost your home when Wall Street investment bankers made a hash of the home mortgage industry, you may be terrified to learn they want to become your landlord.

Up to now most single home rentals have been owned by local owners or regional companies. Private equity firms are taking advantage of loopholes in financial regulation and the depressed housing market to create national home rental corporations. They are scooping up foreclosed homes at fire sale prices all across the country and turning them into rentals. Their ultimate aim is to turn the equity in all those rental agreements into rent-backed securities that can be bought and sold on Wall Street. (Gentlemen, place your bets!)

Under this business model, the equity present in rental agreements will be aggregated into tranches based on confidence in the financial ability of the tenants pay their rent. The collateralized security instruments from these tranches will have various rates of return based on risk factors from the underlying leases. Should these rent-backed securities default, the security owners may even have an ownership stake in the properties to fall back on. If you haven’t heard about this before, you can read more in the Wall Street Journal, the Daily Finance or one of several good articles in Mother Jones.

The initial sale of rent-backed securities by these corporations will allow them to free up equity in these properties to purchase even more distressed homes. If the underlying financial structure of these plans sounds familiar, it should. Substitute mortgage equity for equity in these lease agreements and the securitized bonds are nearly identical to mortgage backed securities that inflated the housing bubble and crashed the economy in 2008. The only element missing so far are the “credit default swaps” inside investors bought to bet that the mortgage bonds would fail.

Hubris is the word that comes to mind when considering that the same class of players who foreclosed on the American Dream now want to be our landlord under these same self-serving schemes.

To be fair, the concept of private equity firms buying distressed houses to fix up and rent does has merit. Turning vacant houses into renovated rental properties has a positive patina best explained in theirpromotional videos.

Moreover, whenever investment money is applied directly to tangible projects that benefit ordinary families it is always a blessing. It brings jobs, boosts local economies, improves the quality of life and strengthens families.

If Wall Street investors could just be satisfied with the profound social benefits and ordinary financial returns on their investments it would be great. In fact, it is what Wall Street owes Main Street for all the pain they inflicted. But social benefits are not the things they value these days, and ordinary investment returns are never good enough. They must relentlessly drive to maximize profits.

Scratch the surface on their nationalized real estate plans and ominous consequences emerge. Ask yourself, what type of landlords will these national private equity firms become?

On April 15, 2014, the grass roots housing advocacy organization, Occupy Our Homes Atlanta (OOHA), published their “grassroots research” to answer that question. They looked at the earliest entrant into this field, the Blackstone Group, which owns Hilton Hotels, the Weather Channel, Sea World and Invitation Homes, a subsidiary that has purchased tens of thousands of homes across the country.

Here is some background on the Blackstone group. It is a private equity firm with global real estate holdings in the U.S., Parts of Europe and China. According to Jon Gray, the Head of Global Real Estate for Blackstone, their real estate holdings make up 60% of their assets, or around $80 billion dollars. It is already the largest landlord in the united states and it sees the distressed U.S. housing market as a growth opportunity.

According to an April 9th, 2014, interview Gray gave on the Fox News network “… distressed asset pricing is attractive,” with single family homes selling for less than half their pre-recession values in parts of Europe and the U.S. Blackstone has already purchased 47,000 foreclosure homes in 14 US cities, spending $8 billion dollars, or an average of $190,000 per home. Blackstone is betting on rising housing prices in part because depressed new home construction is a third of what it was before the recession.

What Blackstone doesn’t say can be found in the OOAH research report on how this nation’s biggest landlord has affected renters in Atlanta. Families who rent from Invitation Homes in the Atlanta area face higher rents, higher rental fees, less responsive property management service and some even face automatic rent increases as high as 20% per year. The OOAH report caught the attention of Congressman Mark Takano, who sent out a disturbing press release highlighting some of the findings ( appended below).

And there are other potentially negative consequences yet to follow. Tenancy laws and regulations are diverse across the states and local municipalities to reflect local and regional values. What impact might the power of national corporate landlords have in influencing those laws to suit their business interests?

The shame of it all is that most of the former home owners now renting from private equity landlords would still be in their own homes if it hadn’t been more profitable for banks to foreclose than to participate in the federal government’s HAMP, HARP, PRA or 2MP mortgage assistance programs. But then, if that happened, this private equity investment opportunity wouldn’t exist today, would it?

————————————————————–

 

FOR IMMEDIATE RELEASE

Wednesday, April 16, 2014

Contact: Brett Morrow

brett.morrow@mail.house.gov; (202) 225-2305

 

Rep. Mark Takano Statement on “Blackstone: Atlanta’s Newest Landlord” Report

Washington DC – Earlier today, the organization Occupy Our Homes Atlanta released its report titled “Blackstone: Atlanta’s Newest Landlord” showing that:

· Tenants wishing to stay in their homes can face automatic rent increases as much as 20% annually.

· Survey participants living in Invitation Homes pay nearly $300 more in rent than the Metro Atlanta median.

· 45% of survey participants pay more than 30% of their income on rent, by definition making the rent unaffordable.

· Tenants face high fees, including a $200 late fee for rental payments.

· 78% of the surveyed tenants do not have consistent or reliable access to the landlord or property manager.

After the report was released, Rep. Mark Takano issued the following statement:

“The report released today gives a snapshot of the experiences faced by Invitation Homes renters in the greater Atlanta area, and further shows the need for Congress and regulatory agencies to examine the growing phenomenon of large institutional investors owning rental properties. Local residents who rent from large institutional investors should not be subjected to unfair practices or poor service. I once again call on the House Financial Services committee to hold hearings on the issue, and request regulatory agencies begin looking at the emerging REO to rental market.”

Background Information:

In January, Rep. Takano released his Riverside” report examining the cause of rising rents in Riverside County, California. In the report, Takano discovered that one of the potential causes of rents increasing is the rise of large institutional investors purchasing single-family homes, renting them out.

Takano then sent a letter to House Financial Services Chairman Jeb Hensarling and Ranking Member Maxine Waters requesting Congressional hearings into single-family rental backed securities that are being developed by The Blackstone Group, Colony Capital, American Homes 4 Rent, and others.

Takano later sent letters to federal regulators, including the Department of Housing and Urban Development and the Federal Housing Finance Agency, requesting information about how institutional landlords can impact local housing markets and the tenant experience.

###

 

Brett Morrow

Communications Director | Congressman Mark Takano

1507 Longworth HOB, Washington, DC 20515

Office: (202) 225-2305 | Cell: 202-440-2268

 

Image Credits:

House Image : (World Law Directory) http://www.worldlawdirect.com/forum/law-wiki/12476-unlawful-detainer.html

Jon Gray Image: (Fox News Network) https://www.youtube.com/watch?v=d5pGbKGQtrU)

Wall Street: (Google Images) etruthseeker.co.uk/?p=54365

“Dark Pools” Caste a Shadow Over Stock Prices

We now know that the universe is filled with dark matter. This strange substance cannot be seen, heard, felt or touched, and doesn’t interact in any way with ordinary matter. Even so, its presence can be felt by its gravitational influence. It is the enormous amount of dark matter that causes galaxies to form and to spin as rapidly as they do.

While dark matter may ultimately be beneficial to the cosmos, “dark pools” in the financial markets doesn’t seem like a good idea. When large investors buy large blocks of stocks outside of public view, they do so to obtain a tactical advantage. The market effect of dark trading is that the real value of openly traded stocks is less certain. This is another example of how the playing field is tilted away from mom and pop investors and towards the rich and powerful.

http://www.reuters.com/article/2014/04/11/us-sec-darkmarkets-idUSBREA3A0CP20140411

 

 

WASHINGTON/NEW YORK (Reuters) – U.S. securities regulators are considering testing a proposed reform that could drive business to major…

REUTERS

Four Graphs on What Hurts the Working Class

We never hear any reference to the working class these days. The media and our politicians only speak of the “middle class” as if that covers everyone who isn’t either poor or wealth. Even references to the poor are scarce. The working class exists. They are sandwiched between the poor and the middle class and they are being squeezed into poverty. It is cruel to ignore them and the terrible pain they are suffering. What has happened to them, aside from being ignored can only be touched on by the four graphs that follow. These were presented in a conversation I had with conservative friend of mine who has forgotten the working class exists. There are many factors hurting the working class. This conversation was only about four factors, wage suppression, the upward redistribution of wealth, working class decent into poverty and declining upward mobility. Post this is my way of addressing what I believe is the most hurtful factor of  them all… public silence.

Q:  I always thought of the owners as the producers of the jobs that the workers have. You say that it is the workers who are the producers. Have you ever been employed by someone on welfare?

A:  Owners coordinate the workforce, but it the employees who do the work that makes the products or services. So in a real sense, the workers ARE the producers. And this has nothing to do with welfare at all.  Jobs are not a product. Stuff is a product. Things to sell or trade is a product. Workers are key to making stuff or offering stuff yet when they want a fair share of the value they create they are treated like thieves. Read this and you will know what I am talking about even if you don’t agree:

http://aseyeseesit.blogspot.com/…/fair-wage-for-days…

hourly GDP vs Wage graph

I also just ran across this table (below) that shows were all the Hourly GDP wealth has gone since the mid-’70’s.

CEO Compensation

Source:  https://scontent-a-lga.xx.fbcdn.net/hphotos-prn2/1480602_10200873563747333_1576469932_n.jpg

Q:  Why should it matter how much a C.E.O. makes if their workers remain on the job? It’s one of the great things about this country. You can work where ever and for whom ever you want.  Someone please explain to me why it is greed for C.E.O.’s to make deals to be paid as much as the market will bear but it is ok for workers to make deals to make as much as the market will bear.

 A:  It may not matter to you at all, but anyone who wonder why they can’t have collective barganing while the CEO is making 400 times their salary might have questions, especially since this is strictly a feature of the US economy and others around the world are paid better than we are relative to their economies.

Don’t forget, almost  40% of people who work full time are poor. I’m not sure what percentage of the poor they account for, but it is clear when we speak of the poor we are not speaking only of people who are disabled, elderly, retired or unemployed.

Working and Non working Poor bar graph

http://upload.wikimedia.org/wi…/en/7/74/Pov_crossnatl.jpeg

Note here that in the US, the number of working poor (blue bar in right hand column) is twice the number of non-working poor. So when you and I talk about the poor, you are defining it as welfare recipients while I broadly define it as everyone living below the poverty line, the majority of whom work full time. That’s partly why we have a disconnect on this topic. In my understanding, most poor people work.

Q:  I wonder how many of the poor who are now C.E.O.’s would agree with you? Or would they say : “Work hard towards your goal, as I did, and you can achieve anything.”.  Isn’t this what made our economy great?  Not people who wanted a wage so they could be comfortable in the position they have today?  Flipping burgers at McDonalds is not supposed to be a permanent career goal. Even the management at McDonalds wants people to move up. Or am I wrong about incentive and ambition?

A:   There are 17,000 companies with 500 employees or more. There are 43 million poor. If 20% of CEO’s started out as poor children that would mean there are only about 4,200 CEO openings for 43 million potential applicants. It’s a safe bet that far fewer than 20% of CEO’s come from poverty. In fact, less than 20% of children born to poorest families will make it into the middle class in their lifetime. Less than 8% will make over $140k/year, which is approximately the income line where the richest fifth starts. Of those at the top, only the smallest fraction will become a CEO. I believe that if you really understood the economic situation in America you, of all the folks I know, would be a big supporter of the working class.

Upward Mobility bar graph

source: http://www.pewtrusts.org/…/Eco…/PEW_Upward%20EM%2014.pdf

As for incentive and ambition, a good paying job that makes one economically self-sufficient is the highest motivator.  But a self-sufficient wage for a single earners is over  $30,000/year whereas the median wage for a single earners is less than $26,000/year. In other words, the incentives are less than optimal in today’s economy, and no amount of hard work or individual effort will make a difference for most people until even low wage workers receive a fair wage for a days work.

Austerity for Dummies, Like Us

Imagine owning a small manufacturing business with 25 happy employees.  After paying overhead , suppliers, employees, benefits and your Potter’s Bank business loan you have just enough to get by.

One day your suppliers find they can’t get raw materials because of artifical shortages and price spikes caused by futures speculators that work at bank. The suppliers they need to borrow money to pay for higher priced raw materials, at least until they can adjust with worker layoff and cutbacks. Potter’s Bank charges them higher interest rates because now they’re “risky” borrowers.

Your suppliers must pass along their higher costs to you, so now its your turn to cut wages, benefits and hours. Your employees grumble and can’t keep up with the workload. Production stalls, but also sales start to drop because all the affected workers are also your customers.

One day you discover you can’t pay the bank loan, so you go to Potter’s Bank to renegotiate terms.  Potter tells you what he has been telling everyone:

“You’re a credit risk! Your workers make too much and the cost of their benefits is rising. Cut benefits, cut wages, layoff some of those lazy workers and you will be more efficient. Only then will I loan you the money you need.  Do as I ask or Ill  raise your interest rates further or foreclose on your business.”

This is the austerity trap. Bankers use their leverage to play both ends against the middle forcing both businesses and governments to be more labor efficient. It squeezes more production out of fewer workers for lower wages and benefits. It also suppresses consumption because fewer consumers are employed and those who work have less income or job security. It doesn’t matter if austerity is imposed on businesses or the public sector, the effects are the same.

Imposing austerity is like digging a hole in the economy, the more you dig the deeper the hole. It is good for bankers but bad for workers. It increases corporate profits but reduces personal incomes (except for the very rich). It shrinks the size of government but reduces support to the poor and unemployed people it creates.  What ever hurts workers hurts consumers which suppresses consumption and depresses the economy, which then hurts more workers in a literally vicious cycle.

Making debt reduction a priority during a recession, rather than creating jobs and putting money back into the hands of consumers, is austerity. As the article below points out with a graph, shutting down the government and causing the government sequester to lower government spending at this time has hurt recovery. It is the wrong prescription.

In a World Without Austerity…

By Adam Hersh | October 4, 2013

http://www.americanprogress.org/issues/economy/news/2013/10/04/76305/in-a-world-without-austerity/

Thanks to the federal government shutdown, there is an absence of new U.S. job market data for September 2013. Let’s take a moment to imagine the kind of economy we might see in the United States today had we not just lived through three years of fiercely divisive politicking for fiscal austerity—sharp cuts to public services and investments, as well as cuts to taxes on America’s wealthiest people.

If federal and state governments had not adopted policies of fiscal austerity, today’s jobs report from the Department of Labor would likely be telling us, as shown in Figure 1:

  • U.S. employers added more than 260,000 jobs in September.
  • The unemployment rate for September fell below 6 percent.
  • Since December 2010, the U.S. economy has added more than 8.2 million new jobs—or 2.4 million more than have actually been added.

employment without fiscal austerity

The Economy Didn’t Stall for Congress During Recession

by Brian T. Lynch, MSW

I know a place you can work where, on average, employees can accumulates personal wealth at a rate of over 15% per year!  The catch?  You have to get elected to Congress.
This is just one bit of information parsed from data on the average wealth of members of Congress.  The database is available at OpenSecrets.Org [http://bit.ly/vRBruV], courtesy of The Center for Responsive Politics.  It comes with some serious caveats. According to OpenSecrets:
By law, members of Congress are only required to report their wealth and liabilities in broad ranges. It’s therefore impossible to precisely determine how much value their assets are worth, or have gained or lost. from year to year. The Center for Responsive Politics determines the minimum and maximum possible asset values for each member of Congress to calculate a member’s average estimated wealth.”
Congress has set rules for itself so that we can only guess at how much each member is worth.  Their net worth can only be expressed as an average within a broad margin of error.  But it is still possible to learn some things about Congress as a whole if you aggregate the numbers and analyze how they change over time.
The analysis which follows is based on average Congressional wealth data for two points in time, in 2004 and in 2010.  It appear that the data only includes members who were in the House or Senate during this six year period.  Keep in mind that during this period of time the United States economy nearly collapsed.
Keep in mind that of the 383 members of the House or Senate included in this analysis, the fortunes of 140  member declined while in office.  The figures below on combined wealth adds up all the gains and subtract all the losses to arrive at the average wealth increases.  Also, to make the graphics more comprehendible and directly comparable, the dollar amounts are divided by the number of representative in each category and expressed as averages per legislator.
The other point to remember is that there are five members in the legislature, three in the House and two in the Senate, who are very wealthy.  There combined wealth is estimated at over $1.5 trillions dollars.  This skews the averages and makes the average member of Congress appear to be more wealthy than the are.  Nevertheless, this analysis is primarily about how Congressional wealth grows over time.
The Wealthiest US Legislators               Estimated Net Worth
Issa, Darrell (R-Calf)  House
$448,125,017
McCaul, Michael (R-Tex) House
$380,411,527
Harman, Jane (D-Calf) House
$326,844,751
Kerry, John (D-Mass) Senate 
$231,722,794
Kohl, Herb (D-Wis) Senate
$173,538,010
Combined Wealth
$1,560,642,099
 
 
 
So did the personal wealth of our legislators grow over the six year period between 2004 and 2010? 
Yes.  The combined person wealth of our legislators rose from around $2.2 billion in 2004 to $3.1 billion in 2010.  That is a 40.4 % growth in net worth, or around a 6.7% annual growth rate.*
Was there a difference in the growth rate between the political parties?
Yes. Republican’s as a group faired better than Democrats.  Republican’s had a 12.9% annual growth rate in personal wealth while Democrats gained at a 2.7% rate.  The combined gains of the three independents in the Senate was high also, but as you can see their combined income per member was much smaller that that of their colleagues.
 
 
Was there a difference between the House and the Senate in the growth rate of personal income?
Yes again.  The Senate is a much wealthier body than the House and it actually lost a little net worth over this six year period.  The House gained 75.1% in personal wealth for a 12.5% annual rate of growth.
When the data is further broken down by both political party and Congressional chamber it appears that Senate Democrats are collectively the wealthiest group, and the only group that lost a little personal wealth over six years.  The House is the wealthiest chamber for Republican’s, and it is also the chamber with the highest rate of growth in personal wealth.  House Republican’s as a group gained 92.8% in net worth while House Democrats gained 51% over six years.
Average Wealth Increase per Legislator by Party and Chamber – 2004 and 2010
Wealth /Member in 2004
Wealth /Member in 2010
Six Year Dif /Member
Total % Change
Annual % Change
House Democrats    (n=176)
$2,918,824
$4,408,237
$1,489,414
51.0%
8.50%
House Republicans (n=133)
$5,243,557
$10,111,971
$4,868,414
92.8%
15.47%
Senate Democrats   (n=40)
$20,516,818
$19,323,256
-$1,193,561
-5.8%
-0.97%
Senate Republicans (n=41)
$4,394,130
$5,128,482
$734,352
16.7%
2.79%
Senate Independents (n=3)
$577,182
$1,359,855
$782,673
135.6%
22.6%
Did everyone in Congress fair well over this six year period?
No. As mentioned earlier, 140 legislators lost wealth during this time.  The graph below breaks down the numbers of those who gained and lost personal wealth while in Congress.  House Democrats had the highest percentage of gainers at 67% while Senate Democrats has the lowest ratio of gainers at 59%.  The percent of those gaining personal wealth among House and Senate Republican’s was 62% and 65% respectively.  Overall, almost two-thirds (64%) of Congress gained personal wealth during their time in office.
  
 What about those who gained the most?  Just how well did they do?
There are at least two different ways to identify who gained the most.  You can look at in terms of dollar amounts gained or as a percentage of growth in net worth.  In come cases percentages can be misleading.  A person with $10.00 who gains a buck has a 10% rate of growth, but you wouldn’t say they got rich.  So both measures were used here and the results are in the following two graphs below.
Looking at both the percentage increase and actual dollars increase methods, the top ten House Republican’s, with the highest gains in personal wealth, clearly out paced the rest of their top ten Congressional colleagues in accruing wealth.  As a percentage increase in personal wealth the top ten Republican Senators and top ten Democratic Senators did equally well. The wealth of House Democrats appears to barely rise on the graph above, but that’s because they start out with so little compared to their colleagues.  The actual percentage increase for the top ten Democrats in the House was over 4000%.
So what does all of this mean?
Our legislative representatives are rich.  I’m not an economist, or a researcher, but a few conclusions do seem apparent from this analysis.  Congress, as a group, is quite wealthy.  While it may be true that there are over 400 billionaires in the United States and none in Congress, it is remarkable that nearly half of those in Congress (49%) were millionaires in 2010.   About 10% in Congress were multi-millionaires and five members were among the 1% of wealthiest Americans[1].  The wealthiest group in Congress are Democratic Senators.  They start out that way and stay that way, although they gain the least by being there.
While nearly a third of Congress are less well off after six years in service, the majority were better off and many were far better off in 2010 than in 2004.  The actual growth in personal wealth seems to be more apparent among Republican’s, particularly House Republicans, but the percentage of growth in personal wealth among the top ten House Democrats extraordinarily high.  Only 28 legislators have a net worth under $100,000.00 and only 15 are in debt.  I will leave it to the reader to contrast this with the your own situations and the folks you know.   What this analysis can’t do is tell us why  the data is as it appears. I will leave that to others for now.
All of the tables for this analysis appear below.  I encourage readers of this blog to review them for accuracy and use them to develop more information regarding the wealth patterns or our federal representatives .  Please leave comments if you find any errors or omissions in the tables.  I will make appropriate corrections on this blog post.

[1] In defining “the 1%” I prefer an approach based on wealth, not income.  Wealth is power.  Income is only an indirect measure of wealth and power.  (Is the strength of a batter measured by the rate at which it is charged or by the energy has stored?).  For my purposes here I am defining the 1% wealthiest legislators in Congress beginning with the assumption that one percent of American’s own 35% of the wealth in the US.  The net worth of all American households in 2009 was $54 trillion dollars.  There were 121,611,029 households in America in 2009 according to the US Census Bureau.  That means 1% of all households equals 1,216,610 Americans. So 1 % of all households own 35% of $54 trillion, or $18.9 trillion dollars.  If my math is correct that means that the average wealth of a household among the top 1% equals $149,277,318.
Total Wealth Increase of All US Legislators Between 2004 and 2010
Average Wealth in 2004
Average Wealth in 2010
Difference in Six Years
Total % Change
Annual % Change
All Members      (n=393)
$2,213,699,631
$3,108,019,528
$894,319,897
40.4%
6.7%
All Democrats    (n=216)
$1,334,385,659
$1,548,780,022
$214,394,363
16.1%
2.7%
All Republicans (n=174)
$877,552,427
$1,555,159,941
$677,607,514
77.2%
12.9%
Independents     (n=3)
$1,731,545
$4,079,565
$2,348,020
135.6%
22.6%
Senators            (n=84)
$1,002,563,604
$987,277,595
-$15,286,009
-1.5%
-0.3%
Congressmen    (n=309)
$1,211,147,532
$2,120,971,945
$909,824,413
75.1%
12.5%
Average Wealth Increase Per US Legislator by Party and Chamber Between 2004 and 2010
Wealth /Member in 2004
Wealth /Member in 2010
Six Year Dif /Member
Total % Change
Annual % Change
All Members       (n=393)
$5,632,823
$7,908,447
$2,275,623
40.4%
6.7%
All Democrats     (n=216)
$6,177,711
$7,170,278
$992,566
16.1%
2.7%
All Republicans  (n=174)
$5,043,405
$8,937,701
$3,894,296
77.2%
12.9%
Independents      (n=3)
$577,182
$1,359,855
$782,673
135.6%
22.6%
Senators             (n=84)
$11,935,281
$11,753,305
-$181,976
-1.5%
-0.3%
Congressmen     (n-309)
$3,919,571
$6,863,987
$2,944,416
75.1%
12.5%
Average Wealth Increase of All US Legislators by Party Between 2004 and 2010
Average Wealth in 2004
Average Wealth in 2010
Difference in Six Years
Total % Change
Annual % Change
House Democrats    (n=176)
$513,712,948
$775,849,769
$262,136,821
51.0%
8.50%
House Republicans (n=133)
$697,393,079
$1,344,892,164
$647,499,085
92.8%
15.47%
Senate Democrats   (n=40)
$820,672,711
$772,930,253
-$47,742,458
-5.8%
-0.97%
Senate Republicans (n=41)
$180,159,348
$210,267,777
$30,108,429
16.7%
2.79%
Senate Independents (n=3)
$1,731,545
$4,079,565
$2,348,020
135.6%
22.6%
Average Wealth Increase per Legislator by Party and Chamber – 2004 and 2010
Wealth /Member in 2004
Wealth /Member in 2010
Six Year Dif /Member
Total % Change
Annual % Change
House Democrats    (n=176)
$2,918,824
$4,408,237
$1,489,414
51.0%
8.50%
House Republicans (n=133)
$5,243,557
$10,111,971
$4,868,414
92.8%
15.47%
Senate Democrats   (n=40)
$20,516,818
$19,323,256
-$1,193,561
-5.8%
-0.97%
Senate Republicans (n=41)
$4,394,130
$5,128,482
$734,352
16.7%
2.79%
Senate Independents (n=3)
$577,182
$1,359,855
$782,673
135.6%
22.6%
Top Ten Legislators /w Biggest Jump in Wealth ($ increase) by Party and Chamber – 2004 and 2010
Aggregated Totals
Average Wealth in 2004
Average Wealth in 2010
Difference in Six Years
Total % Change
Annual % Change
House Democrats    (n=176)
$327,705,235
$568,142,204
$240,436,969
73.4%
12.2%
House Republicans (n=133)
$331,746,289
$1,005,864,579
$674,118,290
203.2%
33.9%
Senate Democrats   (n=40)
$137,206,389
$216,341,049
$79,134,660
57.7%
9.6%
Senate Republicans (n=41)
$21,576,271
$81,888,741
$60,312,470
279.5%
46.6%
Top Ten Legislators /w Biggest Jump in Wealth ($ increase) by Party and Chamber – 2004 and 2010
Average per Legislator
Wealth /Member in 2004
Wealth /Member in 2010
Six Year Dif /Member
Total % Change
Annual % Change
House Democrats    (n=176)
1,861,962
3,228,081
1,366,119
73.4%
12.2%
House Republicans (n=133)
2,494,333
7,562,892
5,068,559
203.2%
33.9%
Senate Democrats   (n=40)
3,430,160
5,408,526
1,978,367
57.7%
9.6%
Senate Republicans (n=41)
526,251
1,997,286
1,471,036
279.5%
46.6%
Top TenLegislators /w Biggest Jump in Wealth (% increase) by Chamber & Party – 2004 and 2010
Aggregated Totals
Average Wealth in 2004
Average Wealth in 2010
Difference in Six Years
Total % Change
Annual % Change
House Democrats*
$779,531
$31,996,557
$31,217,026
4004.6%
667.4%
House Republicans
$35,430,212
$392,877,862
$357,447,650
1008.9%
168.1%
Senate Democrats
$19,415,702
$56,516,827
$37,101,125
191.1%
31.8%
Senate Republicans
$11,871,405
$67,686,976
$55,815,571
470.2%
78.4%
Top TenLegislators /w Biggest Jump in Wealth (% increase) by Chamber & Party – 2004 and 2010
Average per Legislator
Wealth /Member in 2004
Wealth /Member in 2010
Six Year Dif /Member
Total % Change
Annual % Change
House Democrats*
$4,429
$181,799
$177,369
4004.6%
667.4%
House Republicans
$266,393
$2,953,969
$2,687,576
470.2%
78.4%
Senate Democrats
$485,393
$1,412,921
$927,528
191.1%
31.8%
Senate Republicans
$289,546
$1,650,902
$1,361,355
470.2%
78.4%
* One member, P. Kennedy, accounted for most of the increase.  Excluding him for the in rank on the list yeilds an increase of 1,602.6% or 267.1% annual increase.
*correction: on an earlier version I mistakenly said trillions instead of billions in referring to the collective wealth of congress.

Immigration Myths Hide the Benefits Says US Chamber of Commerce

From the US Chamber of Commerce: This ultra-conservative organization finally comes clean with a DATA DRIVEN VIEWPOINT support their position on immigration and how it benefits the US economically.  http://www.scribd.com/doc/179652570/Immigration-Myths-and-Facts

 Immigration Myths and Facts

Despite the numerous studies and carefully detailed economic reports outlining the positive effects of immigration, there is a great deal of misinformation about the impact of immigration.  It is critical that policymakers and the public are educated about the facts behind these fallacies. [Says the US Chamber of Commerce]  

Below I present the major points of their arguments. Please go to their website to read a detailed explanation for each of these points. 

JOBS  MYTH: Every job filled by an immigrant is a job that could be filled by an unemployed American.

FACT: Immigrants typically do not compete for jobs with native-born workers and immigrants create jobs as entrepreneurs, consumers, and taxpayers
WAGES MYTH: Immigrants drive downthe wages of American workers.
FACT: Immigrants give a slight boost to the average wages of Americans by increasing their productivity and stimulating investment
ECONOMY MYTH: The sluggish U.S. economy doesn’t need more immigrant workers.
FACT: Immigrants will replenish the U.S. labor force as millions of Baby Boomers retire.
UNEMPOLOMENT MYTH: At a time oF high unemployment, the U.S. economy does not need temporary foreign workers.
FACT: Temporary workers from abroad fill specialized needs in specifc sectors of the U.S. economy.
HIGH-TECH WORKERS MYTH: There is no shortfall of native-born Americans for open positions in the natural sciences, engineering, and computer science and thus no need for foreign-born high-tech workers.
FACTS: Job openings are expanding at educational levels where demographic data show too few native-born students, so we can expect these shortfalls to persist in the future. Moreover, relative to other economic indicators, wages are increasing in STEM jobs requiring higher education.
COMMUNITY IMPACT MYTH: Immigrants hurt communities that are struggling economically.
FACT: Immigrants have economically revitalized many communities throughout the country.
TAXES MYTH: Undocumented immigrants do not pay taxes.
FACT: Undocumented immigrants pay billions of dollars in taxes each year.
WELFARE MYTH: Immigrants come to theUnited States for welfare benefts.
FACT: Undocumented immigrants arenot eligible for federal public beneftprograms, and even legal immigrants face stringent eligibility restrictions.
INTEGRATION MYTH: Today’s immigrants are not assimilating into U.S. society.
FACT: Today’s immigrants are buying homes, becoming U.S. citizens, and learning English.
CRIME MYTH: Immigrants are more likely to commit crimes than native-born Americans.
FACT: Immigration does not cause crime rates to rise, and immigrants are actually less likely to commit crimes or be behind bars than native-born Americans.
BORDER SECURITY MYTH: Reforming the legal immigration system will not help secure the border.
FACT: Immigration reform is an integral part of any effective border security strategy.

Labor Day – A Day for Reflection

Labor Day. For much of the world this is a day of reflection to honor the martyrs who stood up to wealthy capitalists in the fight for dignified employment, the eight-hour workday and the five-day work week. It is a day to honor those who sacrificed their lives so that we might be home in time to eat dinner with our families and to have Saturday’s off to watch our children play baseball or soccer. It is a reminder that many of the blessings we take for granted today came at a terrible price.  If we forget how we got these benefits they will slowly erode over time and history will reap itself.

Much of the world celebrates Labor Day not in August, but in May. Have you ever wondered why? Would you be surprised to learn that labor celebrations around the world commemorate events that took place in Chicago in 1816?  Students of history will recognize this as the Haymarket, or May Day Massacre.  Below is one account from the Encyclopedia of Chicago History via Wikipedia.  http://www.encyclopedia.chicagohistory.org/pages/571.html

Haymarket and May DayLABOR UNREST, 1886 (MAP)

On May 1, 1886, Chicago unionists, reformers, socialists,anarchists, and ordinary workers combined to make the city the center of the national movement for an eight-hour day. Between April 25 and May 4, workers attended scores of meetings and paraded through the streets at least 19 times. On Saturday, May 1, 35,000 workers walked off their jobs. Tens of thousands more, both skilled and unskilled, joined them on May 3 and 4. Crowds traveled from workplace to workplace urging fellow workers to strike. Many now adopted the radical demand of eight hours’ work for ten hours’ pay. Police clashed with strikers at least a dozen times, three with shootings.

At the McCormick reaper plant, a long-simmering strike erupted in violence on May 3, and police fired at strikers, killing at least two. Anarchists called a protest meeting at the West Randolph Street Haymarket, advertising it in inflammatory leaflets, one of which called for “Revenge!”

The crowd gathered on the evening of May 4 on Des Plaines Street, just north of Randolph, was peaceful, and Mayor Carter H. Harrison, who attended, instructedpolice not to disturb the meeting. But when one speaker urged the dwindling crowd to “throttle” the law, 176 officers under Inspector John Bonfield marched to the meeting and ordered it to disperse.

Then someone hurled a bomb at the police, killing one officer instantly. Police drew guns, firing wildly. Sixty officers were injured, and eight died; an undetermined number of the crowd were killed or wounded.

The Haymarket bomb seemed to confirm the worst fears of business leaders and others anxious about the growing labor movement and radical influence in it. Mayor Harrison quickly banned meetings and processions. Police made picketing impossible and suppressed the radical press. Chicago newspapers publicized unsubstantiated police theories of anarchist conspiracies, and they published attacks on the foreign-born and calls for revenge, matching the anarchists in inflammatory language. The violence demoralized strikers, and only a few well-organized strikes continued.
HAYMARKET POSTER, 2002

Police arrested hundreds of people, but never determined the identity of the bomb thrower. Amidst public clamor for revenge, however, eight anarchists, including prominent speakers and writers, were tried for murder. The partisan Judge Joseph E. Gary conducted the trial, and all 12 jurors acknowledged prejudice against the defendants. Lacking credible evidence that the defendants threw the bomb or organized the bomb throwing, prosecutors focused on their writings and speeches. The jury, instructed to adopt a conspiracy theory without legal precedent, convicted all eight. Seven were sentenced to death. The trial is now considered one of the worst miscarriages of justice in American history.

Many Americans were outraged at the verdicts, but legal appeals failed. Two death sentences were commuted, but on November 11, 1887, four defendants were hanged in the Cook County jail; one committed suicide. Hundreds of thousands turned out for the funeral procession of the five dead men. In 1893, Governor John Peter Altgeld granted the three imprisoned defendants absolute pardon, citing the lack of evidence against them and the unfairness of the trial.

Inspired by the American movement for a shorter workday, socialists and unionists around the world began celebrating May 1, or “May Day,” as an international workers’ holiday. In the twentieth century, the Soviet Union and other Communist countries officially adopted it. The Haymarket tragedy is remembered throughout the world in speeches, murals, and monuments. American observance was strongest in the decade before World War I. During the Cold War, many Americans saw May Day as a Communist holiday, and President Eisenhower proclaimed May 1 as “Loyalty Day” in 1955. Interest in Haymarket revived somewhat in the 1980s.

A monument commemorating the “Haymarket martyrs” was erected in Waldheim Cemetery in 1893. In 1889 a statue honoring the dead police was erected in the Haymarket. Toppled by student radicals in 1969 and 1970, it was moved to the Chicago Police Academy.