An unofficial poll

What do CQ Researcher readers think about today's announcement that the CEO of GM resigned at President Obama's request? Vote in the unofficial poll at the right --->

For background on the Auto Industry, check out the February 6, 2009 issue on "The Auto Industry's Future". An excerpt from that issue is here on the blog.

Future of Journalism

Will newspapers' decline weaken democracy?

By Tom Price, March 27, 2009

Thomas Jefferson once famously remarked that if he had to choose between government without newspapers or newspapers without government, he wouldn't hesitate to preserve newspapers. Today, however, newspapers across the country are declining in circulation, advertising and profitability. Some are ceasing to publish. Others are reducing or closing Washington and state-capital bureaus, laying off staff and cutting back the news coverage they provide. Many journalists, scholars, political activists and government officials worry that government without newspapers could be on the horizon, and that citizens then would be unable to obtain sufficient information for effective self-government. As more Americans turn to the Internet and cable television for news, however, others are hopeful that new forms of journalism will fill the gaps. Meanwhile, newspapers are attempting to give themselves new birth online.

The issues:

* Can the Internet fill the reporting gaps caused by the decline of newspapers?
* Are the new media bad for democracy?
* Can philanthropy save journalism?

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Overview of the CQ Researcher issue on "Future of Journalism"

By Tom Price, March 27, 2009

Forty-three years ago, Time magazine posed a provocative question on its cover: “Is God Dead?” The answer turned out to be: “not so much.”

This February, the magazine's cover pondered ways to stave off the death of newspapers. With the industry copiously bleeding red ink, reporters and editors losing jobs by the thousands and online news becoming increasingly popular — and controversial — Time's editors aren't the only people wondering about journalism's future. Certainly the recent news has been grim:

  • The Rocky Mountain News shut down on Feb. 27 after reporting about the Denver region for 150 years
  • The 146-year-old Seattle Post-Intelligencer turned off its presses on March 17, becoming a Web-only publication.
  • The Christian Science Monitor, a highly regarded national daily newspaper since 1908, plans in April to become a Web and e-mail publication, offering only a weekly, magazine-like, printed edition.
  • Thirty-three newspapers — including the Los Angeles Times, Chicago Tribune and Philadelphia Inquirer — sought Chapter 11 bankruptcy protection from December through February.
  • Even the mighty New York Times, heavily in debt, in early 2009 borrowed an additional $250 million at 14 percent interest from Mexican billionaire Carlos Slim Helu, once described by The Times itself as having a “robber baron reputation.”
Newspapers across the country are declining in circulation, advertising and profitability. In 2008 alone, publicly traded newspaper stock prices fell 83 percent. The Fitch credit-rating service forecasts more newspaper closures this year and next, which could leave a growing number of cities with no newspaper at all.

The collapse of newspapers threatens to leave “a dramatically diminished version of democracy in its wake,” John Nichols and Robert McChesney warned.

“Journalism is collapsing, and with it comes the most serious threat in our lifetimes to self-government,” wrote Nichols, The Nation's Washington correspondent, and McChesney, a University of Illinois communications professor. “As journalists are laid off and newspapers cut back or shut down, whole sectors of our civic life go dark.

Thomas Jefferson once famously remarked that, if he had to choose between government without newspapers or newspapers without government, he wouldn't hesitate to preserve newspapers. In the subsequent 222 years, Americans have had both, and newspapers have been citizens' primary source of information about government at all levels.

Many journalists, scholars, lobbyists and government officials worry that the decline of newspapers will leave citizens without sufficient information for effective self-government. They also worry that the fragmented nature of Internet and cable television audiences could turn the clock back to the late-18th and early-19th centuries, when a large number of partisan newspapers printed more opinion than news, and many readers read only publications with which they agreed.

As more Americans turn to the Internet and cable television for news, however, others are hopeful that new forms of journalism will fill the gaps. They envision cable news channels, bloggers, other online content providers and newspapers' own Web sites picking up the slack.

Ironically, newspapers' readership appears to be higher now than ever before as more and more readers access their papers online. U.S. daily newspapers sell about 51 million copies a day, while hosting nearly 75 million unique visitors on their Web sites each month. The New York Times sells about a million newspapers daily and about 1.4 million on Sunday, while its Web site attracts 20 million unique visitors monthly.

Circulation and advertising revenues have been in a steady decline, however, and newspapers have not figured out how to profit from their Web sites. Only about 10 percent of newspaper advertising revenues are earned on the Internet.

Journalists, scholars, entrepreneurs and philanthropists are looking for ways to finance high-quality, comprehensive reporting online. In addition to the traditional for-profit model, they are experimenting with nonprofit news organizations and philanthropic support of journalistic enterprises. Some are discussing government funding.

No less an Internet luminary than Google CEO Eric Schmidt views the loss of newspapers as “a real tragedy.” “Journalism is a central part of democracy,” he said. “I don't think bloggers make up the difference.”

In fact, most news online is produced by newspapers or by organizations that are funded substantially by newspapers, such as The Associated Press. Many television organizations field significant newsgathering operations. But most lag far behind their newspaper counterparts — particularly at the local, regional and state levels — and they often follow newspapers' reporting leads.

“The decline of newspapers has a big ripple effect,” says Peter Shane, executive director of the Knight Commission on the Information Needs of Communities in a Democracy, “because to a substantial extent television and radio news always has been based on local newspapers' reporting.”

Yet, nearly across the board, newspapers are shrinking the government coverage that's most important to informing citizens in a democracy. Papers that remain in business are cutting staff, closing bureaus and reducing the number of reporters who cover public affairs full time.

Even as the United States is involved in an ever more globalized world — fighting wars in Iraq and Afghanistan, guarding against far-flung terrorist organizations, competing in a globalized economy — U.S. news organizations are bringing their foreign correspondents home.

And with a new administration shaking up Washington and the troubled global economy looking to Washington for leadership, newspapers are shrinking or closing their Washington bureaus. More than 40 regional correspondents — those who cover a particular community's interests in the nation's capital — lost their jobs over the last three years. Even major papers — including the Los Angeles Times, Chicago Tribune and Baltimore Sun — have cut the size of their Washington bureaus. Other publications have eliminated their Washington staffs entirely — notably The San Diego Union whose D.C. reporters won a 2006 Pulitzer Prize for exposing corrupt U.S. Rep. Randy “Duke” Cunningham, who now sits in jail. Newspapers in half the states now have no congressional correspondent.

Associated Press Senior Vice President Sue Cross lamented declining coverage of city, county and state governments as well — not just the number of reporters but their expertise. “Seasoned beat reporters are, in many cases, leaving the industry,” she said.

Virginia's capital press corps shrank by half during the last decade, according to AP Richmond Correspondent Bob Lewis. Maryland media are sending half as many correspondents to Annapolis to cover state government as they did just two years ago, former AP reporter Tom Stukey said. In Broward County, Fla. (Fort Lauderdale), Commissioner John Rodstrom said, local newspapers have cut their county government coverage in half in a year.

“So who's watching out for the interests of the public?” former Boston Globe investigative reporter Walter Robinson asks. “The answer is darn fewer people than used to be.”

The reduction in regional correspondents has generated particular concern in Washington. Regional reporters' importance goes beyond uncovering wrongdoing, according to Michael Gessel, a longtime congressional aide who now works as a Washington lobbyist for the Dayton Development Corp. in Ohio. “At least equally important is the day-to-day — and sometimes mundane — coverage of what our elected officials do that isn't scandalous,” Gessel says.

Members of Congress often work hardest on matters that get the most coverage by news media in their districts, Gessel explains. Without a hometown reporter tracking the districts' interests in Washington, he says, those interests are likely to get less congressional attention.

Citizens also need to know when government does things well, he adds. “All democracies require consent of the governed. If people only hear about scandals, then that consent is withdrawn. Practically speaking, that means less willingness to have their tax dollars support government.”

Political Science Professor Gary Jacobson, of the University of California, San Diego, is among those who discount the loss of local newspapers' Washington-based reporting. “You don't have to be in D.C. to find out what [members of Congress] are doing,” Jacobson said. Reporters can interview lawmakers on their frequent visits home, he said, and citizens can track legislators' activity by accessing government documents online.

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Future of the GOP

by Alan Greenblatt, March 20, 2009
Can Republicans stage a comeback?

Last November’s sweeping election of Barack Obama and further losses in Congress presented Republicans with their worst defeat in more than a decade. Republicans recognize that they are at a low ebb but believe they still have a firm foundation for success. Congressional Republicans have decided to oppose Obama’s spending proposals, rather than trying to collaborate in a bipartisan fashion. They believe a clear statement of core party principles – lower taxes and limited government – will still be popular. Others aren’t convinced, arguing that the party must adapt to challenges it faces among minorities, the young and voters outside the South. Other parties have snapped back quickly from similar losses, but some predict that Republicans face a long period in the political wilderness. Meanwhile, it’s not clear who speaks for the party – the congressional leadership, potential presidential aspirants such as Alaska Gov. Sarah Palin and Louisiana Gov. Bobby Jindal, or even radio talk-show host Rush Limbaugh.

* Is America a center-right nation?
* Can Republicans appeal to minorities and the young?
* Is the GOP a national party?

To read the Overview of this week’s report, click here.
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Overview from the CQ Researcher on the Future of the GOP

By Alan Greenblatt, March 20, 2009

As Senate minority leader, Mitch McConnell is arguably the nation’s most powerful Republican. When he addressed the Republican National Committee (RNC) on Jan. 29, the Kentucky senator spoke of grim news for his party.

“Over the past two elections, we’ve lost 13 Senate seats and 51 House seats,” McConnell said. “Our most reliable voters are in decline as a percentage of the overall vote, and Democratic voter registration is on the rise.”

After Democratic Sen. Barack Obama’s historic victory last November, Republicans are now the clear minority party, and some say they could be in danger of staying in the political wilderness for a long time.

It’s tempting for Republicans to blame their problems on President George W. Bush, who left office with a 22 percent approval rating – the lowest since Gallup began polling more than 70 years ago. The litany of Bush failures is familiar: The Iraq War, now in its seventh year; the administration’s abysmal response to New Orleans’ needs during Hurricane Katrina; corruption scandals that cost the GOP support even among the party faithful.

Finally, Republicans were blamed for the fiscal crisis that erupted last September. “The economic meltdown had a profound effect on this election,” veteran Republican consultant Tony Fabrizio said in a radio interview two days after Election Day.

The result was a Democratic sweep, with Obama carrying states that had been solidly Republican for decades and racking up the largest popular vote of any Democrat since Lyndon B. Johnson in 1964. Having lost their congressional majorities in 2006, Republicans saw their numbers slip further in 2008.

William Frey, a demographer at the Brookings Institution, says, “Republicans were certainly hurt by the economy, but if the economy had stayed normal, they would have been hurt terrifically by the changes in geography of President Bush and his brand of Republicanism.” Frey’s point: The GOP has become largely identified with conservative social issues popular in the South and risks becoming a regional party appealing primarily to the South, parts of the Mountain West and the Great Plains.

Republicans last fall were shut out on the coasts and lost the suburbs for the first time since 1996. “As Republicans, we know that commonsense, conservative principles aren’t regional,” McConnell told the RNC. “But I think we have to admit that our sales job has been.”

But the party faces other demographic challenges: It is losing ground among minorities and the most educated voters. “The Republican Party is increasingly white, rural and old, in a country that is increasingly less of all those things,” says Jonathan Martin, who covers the party for Politico. “This is now emphatically a minority party in this country.”

Many Republicans would disagree, despite the party’s recent losses. After all, they point out, after Bush’s reelection in 2004 Republicans were talking confidently of building a “permanent majority.” “It was only a few years ago Republicans were thinking they were the natural majority in the country,” says William F. Connelly Jr., a political scientist at Washington and Lee University. “Democrats might not want to operate on that assumption too quickly.”

But Ruy Teixeira, a Democratic analyst and senior fellow at both the left-leaning Century Foundation and the liberal Center for American Progress, says things are different today. “Democrats in 2002 and 2004 still had the demographic wind at their back. Republicans don’t have that. Not only did they get clobbered, not only did they make some mistakes, but the demographic wind is in their face.”

And House Republicans in particular face big disadvantages, says John J. Pitney Jr., a political scientist at California’s Claremont McKenna College. Democrats hold 32 of the 33 House districts in which African-Americans make up 40 percent or more of the population – the only exception being a Louisiana seat where an indicted Democrat was ousted last fall. They also control 31 of the 35 mostly Hispanic seats – all but the four Florida districts dominated by Cuban-Americans, who have long favored Republicans. In addition, Democrats hold all 22 House seats in New England, and all but three of the 29 districts in New York – much of which used to be fertile GOP territory.

While there’s some overlap among those seats, they give Democrats a 103-seat head start toward the 218 needed for a majority. “If Republicans concede these districts, they have to get two-thirds of the rest, which is tough to do,” Pitney says.

Besides problems appealing to minorities and voters in the most populous parts of the country, Republicans have a hard time attracting voters under 30, two-thirds of whom voted for Obama. “People who have come of age during the last decade are the most Democratic population of any cohort,” says Gary Jabobson, a political scientist at the University of California, San Diego. “That might be the most striking legacy of the Bush years in terms of the national, partisan political system.”

Then-Republican National Committee Chairman Mike Duncan in December launched an in-house think tank, the Center for Republican Renewal. “Republicans have grown accustomed to having our party recognized as the ‘Party of Ideas,’ but we must acknowledge that many Americans today believe the party is stale and does not deserve that label,” Duncan wrote in a memo to the RNC.

But he was replaced in January by Michael Steele, a former Maryland lieutenant governor, who quickly canned the think tank. “I’m trying to avoid the use of words that start with ‘re,’ words like renewal, rebuild, recharge, re-this and re-that,” Steele wrote in a memo to RNC members. “I’m convinced we should not re-anything. Instead, we must stand proudly for the timeless principles our party has always stood for.”

So far, Steele’s argument has carried the day within the party. Republicans say the party lost its way during the Bush years by running up deficits and overspending. They say it needs to return to arguing for lower taxes and limited government.

“Liberalism’s preferred solution to working-class insecurity – making America more like Europe through a vast expansion of the tax-and-transfer state – is still unpopular with most voters,” write conservative authors Ross Douthat and Reihan Salam in their book Grand New Party.

All but three congressional Republicans opposed the $787 billion stimulus package enacted in February. The GOP’s congressional leadership has resisted Obama’s entreaties for bipartisan cooperation to help solve the economic crisis and has actively discouraged members from collaborating with Democrats.

“We will lose on legislation, but we will win the message war every day, and every week, until November 2010,” said Rep. Patrick McHenry, R-N.C. “Our goal is to bring down approval numbers for [Speaker Nancy] Pelosi and for House Democrats. That will take repetition. This is a marathon, not a sprint.”

But so far, public opinion polls suggest Republicans are losing the message war. Obama’s approval ratings are much higher than the GOP’s, and Americans give him higher marks for dealing with the economy.

While Republicans believe they have regained their footing with a back-to-basics message on taxes and the size of government, some people say they are not reading the mood of the moment, when many Americans are looking to Washington for action in response to the economic crisis.

And while the party’s base seems content with that message, it’s not clear who speaks for the party – the congressional leadership, potential presidential aspirants such as Alaska Gov. Sarah Palin, or even radio talk-show host Rush Limbaugh. A recent Rasmussen survey found that 68 percent of Republicans say their party lacks a clear leader.

Gov. Bobby Jindal of Louisiana was considered the party’s leading new star but stumbled in his first big national appearance. Although Jindal’s performance giving the Republican Party’s official response to President Obama’s Feb. 24 address to Congress was widely panned – both by liberals angered by its message and conservatives unhappy with his style – Jindal is still considered a comer in GOP circles. The former Rhodes scholar is known to be highly intelligent and has won praise through his efforts to reform Medicaid. Also, Jindal is just 37 – giving him plenty of time to make a comeback on the national stage after a weak initial outing.

Steele has sought to fill the party’s void, making near-constant media appearances. But even some RNC members have complained that he has stumbled repeatedly in his early days as titular head of the party. Two months into his tenure, however, Steele began to cut back on his media appearances in the wake of an interview with GQ in which he expressed support for abortion rights. Steele denied that that was his position. But his need to clarify a number of his public statements led party activists to say he should concentrate on the nuts-and-bolts work of rebuilding the party, such as fundraising and appointing key staff.

Asked about Steele’s performance on CNN’s “The Situation Room” on March 4, Nicolle Wallace, a former top adviser to Bush and Arizona Sen. John McCain’s 2008 presidential campaign, said, “At the beginning of ‘American Idol,’ there are a lot of singers and a lot of them are pretty terrible and that’s where the Republican Party is right now.

“We’re at the beginning of our season,” Wallace continued. “By the time the Republican Party has to stand before voters again, we’ll have our act together.”

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Vanishing Jobs

By Peter Katel, March 13, 2009

Will the president’s plan reduce unemployment?

The news is grim and getting grimmer. The jobless rate recently hit 8.1 percent – the highest level in a quarter-century. American workers lost 651,000 jobs in February alone. All told, more than 12.5 million Americans are jobless – including 2.9 million who have been unemployed for at least 27 weeks. The nation is banking on the Obama administration’s newly enacted, $787 billion “economic stimulus” bill to spark job growth through government spending on infrastructure projects and other programs.

Conservatives argue that the spending won’t help, and some liberals say the magnitude of the crisis calls for still more stimulus money. The huge spending measure also includes funds to encourage states to expand eligibility for unemployment insurance, though some governors are resisting on the grounds that their states will wind up footing future bills. With no quick turnaround predicted, creating or saving jobs will remain the top priority for President Barack Obama and the millions of citizens counting on his administration’s rescue plan.

* Will the economic stimulus bill create or save 3.6 million jobs, as promised?
* Is retraining for new skills the best option for laid-off workers?
* Should unemployment insurance be extended beyond what the recovery act allows?

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Overview from the CQ Researcher on "Vanishing Jobs"

By Peter Katel, March 13, 2009

A layoff last year knocked Duane Simmons’ life off its foundation.. “I don’t hold it against nobody,” the 62-year-old machinist says, without apparent bitterness, “because the same thing is happening everywhere.”

Indeed, in February alone, a record 651,000 Americans lost their jobs, pushing the unemployment rate to 8.1 percent – the highest in 25 years – and the number of unemployed workers to 12.5 million. A whopping 4.4 million jobs have been lost just since the December 2007 start of The Great Recession – as The New York Times calls the current economic crisis.

Simmons’ troubles began when Kennametal, a global metalworking, mining and tool company, bought Manchester Tool Co. of New Franklin, Ohio, where Simmons had labored for 33 years – virtually his entire working life. Kennametal quickly closed the plant where Simmons worked.

He moved his family to Newton, N.C., but his hopes for a new job have failed to materialize. Back home in Ohio, Simmons’ $900-a-month home mortgage proved too heavy a burden, and soon the house was in foreclosure. The pressure of other debts forced Simmons and his wife into bankruptcy. And once his 26 weeks of unemployment insurance were exhausted, the couple began dipping into savings to pay rent and other expenses, with a little help from their son.

As the financial crisis last year expanded into all sectors of the economy, jobs and joblessness became the No. 1 issue for millions of Americans. A poll conducted for The Associated Press in mid-February showed that 47 percent of respondents were worried about losing their jobs, and 65 percent knew someone who had been laid off.

The pace and scale of layoffs accelerated in early 2009, with Jan. 27 an especially bleak day: Companies announcing big layoffs that day included Home Depot (7,000), Caterpillar (20,000), Texas Instruments (1,800) and Sprint Nextel (8,000). All in all, the first month of the year saw 598,000 jobs evaporate. Then in February General Motors eliminated 10,000 more jobs, even though struggling carmakers had already cut their workforce in 2006-2008 by 80,000, using buyouts and early retirements.

Each layoff announcement accelerates the economic decline that President Barack Obama and his team of economic advisers is struggling to reverse. “Without jobs, people can’t earn,” he said in mid-February at the signing ceremony in Denver for the $787 billion American Recovery and Reinvestment Act – the so-called economic stimulus bill – designed to “create or save” 3.6 million jobs. “And when people can’t earn, they can’t spend. And if they don’t spend, it means more jobs get lost. It’s a vicious cycle.”

Critics – even some liberals – say more needs to be done. “The Obama administration is . . . trying to mitigate the slump, not end it,” wrote Princeton University economist Paul Krugman, winner of the 2008 Nobel Prize in economics and an influential New York Times columnist. “The stimulus bill, on the administration’s own estimates, will limit the rise in unemployment but fall far short of restoring full employment.”

But White House Chief of Staff Rahm Emanuel dismissed the idea that a bill sized to Krugman’s satisfaction could have gotten through Congress. “How many bills has he passed?” Emanuel carped in The New Yorker.

In fact, despite Obama’s call for bipartisanship, every single Republican in Congress – save for three senators – voted against the stimulus legislation, which includes billions of dollars to finance public-works spending. Many GOP leaders are denouncing the sweeping measure on the grounds that increased government spending alone won’t end the job losses.

“It’s filled with social policy and costs too much,” said Mississippi Gov. Haley Barbour. “You could create just as many jobs for about half as much money.”

But other Republican governors, especially those in hard-hit states, backed the president. “I think he’s on the right track,” said Gov. Charlie Crist of Florida, which lost more than a quarter-million jobs last year.

Nationally, layoffs are eliminating jobs far beyond blue-collar workers like Simmons in the ever-shrinking manufacturing sector. The financial-services industry is shedding so many workers that in New York City – the nation’s financial capital – Mayor Michael Bloomberg has announced a $45 billion retraining program for pink-slipped investment bankers.

“I have competitors closing up shop and going to live with their parents,” says a financial software specialist in the New York area whose own contracts with banks and hedge funds have vaporized.

Newspapers and magazines, already reeling because millions of readers are going to the Web for free news, are laying off thousands of reporters and editors as advertising, the lifeblood of the news business, slows to a trickle. Newspapers have cut more than 3,000 jobs already this year, after slashing more than 15,000 in 2008, according to “Paper Cuts,” a layoff monitor.

“I’d like to stay in journalism,” says journalist William Triplett, who recently lost his job as Washington correspondent for Variety, the entertainment-news daily. “But I don’t know if I can make a sustainable living at it.”

Major law firms have laid off 6,598 lawyers and staff members since Jan.. 1, 2008 – more than half of them since the beginning of this year.

Health care is one of the only sectors of the economy adding jobs, according to the U.S. Bureau of Labor Statistics: It showed a 30 percent increase in employment between February 2008 and February 2009.

With few exceptions, the impact of the stimulus legislation has yet to be felt. In early March, state officials and politicians across the country were still drawing up lists of projects they planned to start with the new funds.

Meanwhile, Americans who have been laid off or who fear layoffs have cut back on shopping – forcing more layoffs in retail and manufacturing.. Consumer spending fell 4 percent in the second half of 2008 after rising steadily for more than 20 years, the Commerce Department reported in March, and savings rose to 5 percent of disposable income in January – a 14-year high.

“People who lose their jobs are going to be spending less,” says Heidi Shierholz, a labor economist at the Economic Policy Institute, a liberal think tank. “For people hanging onto jobs in this climate, there is enormous economic insecurity. If you have the opportunity to build yourself a little cushion, putting off big-ticket purchases, now is the time you’re going to do it – which further pushes out the recovery, until we get people feeling confident again.”

But economists say the vicious cycle of layoffs, reduced spending and business retrenchment or outright failure won’t wind down for some time. The Federal Reserve’s influential Open Market Committee, which sets interest rates, concluded in late January that unemployment will “remain substantially above its longer-run sustainable rate at the end of 2011, even absent further economic shocks.”

As the economic meltdown continues – worldwide as well as within the United States – references to the Great Depression of the 1930s are increasing. In late February, Mark Zandi, chief economist of Moody’s, told The New York Times it was becoming more likely that the recession could turn into a “mild depression.”

His “mild” qualifier is rooted in historical reality. Americans haven’t reached anywhere near an early-1930s level of misery. By 1932, the year Franklin D. Roosevelt was elected president, the unemployed “lived in the primitive conditions of a preindustrial society stricken by famine,” a leading historian of the era wrote.

In fact, conservatives cite statistics showing that today’s 8.1 percent unemployment rate has not even reached the level of the 1981-1982 recession, when the jobless rate reached 10.1 percent. “We’ve had worse recessions,” says James Sherk, a labor policy fellow at the Heritage Foundation. “This is not the most painful, so far.”

But Heather Boushey – a senior economist at the liberal Center for American Progress, which has close ties to the Obama administration – points out that there are 5 million more people unemployed compared to a year ago. “This is the largest annual jump in the number of unemployed since the U.S. Bureau of Labor Statistics began tabulating this data just after World War II,” she writes.

Roosevelt ’s New Deal – a set of programs designed to stimulate the economy, create publicly financed jobs and regulate business and financial practices – dented unemployment but hardly ended it. By 1940, the year before the United States entered World War II, 14.6 percent of workers were unemployed – well below 1933’s catastrophic level of 25 percent but above the annual rates since then.

Economists and historians are still arguing about the New Deal’s effectiveness in countering the Depression. But not in dispute is the social safety net created by the Roosevelt administration, including unemployment insurance (UI).

In 2008, laid-off workers received more than $43 billion in UI payments, including $34 million in “extended benefits” designed to counteract the effects of unusually high unemployment. But only 37 percent of laid-off workers receive benefits, in part because some states exclude part-time and temporary workers. And some Republican Southern governors – including Bobby Jindal of Louisiana – say they’ll refuse stimulus money tied to expanding UI eligibility, which they claim will unfairly burden states in later years.

Even some former full-time workers are excluded from extra benefits. In his new home state of North Carolina, machinist Simmons says he couldn’t get coverage past the standard 26 weeks because he had started withdrawing money from his 401(k) retirement fund. “I found afterward that I can’t get unemployment and the 401(k) at once,” he says. “It’s my fault.”

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Middle-Class Squeeze

by Thomas J. Billitteri, March 6, 2009

Is more government aid needed?

Millions of families who once enjoyed the American dream of home ownership and upward financial mobility are sliding down the economic ladder – some into poverty. Many have been forced to seek government help for the first time. The plunging fortunes of working families are pushing the U.S.. economy deeper into recession as plummeting demand for goods and services creates a downward economic spiral. A consumption binge and growing consumer debt beginning in the 1990s contributed to the middle-class squeeze, but the bigger culprits were exploding prices for necessities such as housing, medical care and college tuition, cuts in employer-funded benefits and, some say, government policies that favored the wealthy. President Barack Obama has promised major aid for the middle class, and some economists are calling for new programs – most notably national health coverage – to assist working Americans.

* Is a stable middle class a thing of the past?
* Is overconsumption at the root of the middle class’ problems?
* Are aggressive new government programs needed to bolster the middle class?

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Overview from the issue on Middle-Class Squeeze (March 6, 2009)

By Thomas J. Billitteri

Cindy Dreeszen, 41, and her husband may have seemed like unlikely visitors to the Interfaith food pantry last month in affluent Morris County, N.J.., 25 miles from New York City. Both have steady jobs and a combined income of about $55,000 a year. But with “the cost of everything going up and up” and a second baby due, the couple was looking for free groceries.

“I didn’t think we’d even be allowed to come here,” Ms. Dreeszen told The New York Times. “This is totally something that I never expected to happen, to have to resort to this.”

Countless middle-class Americans are thinking similar thoughts these days as they ponder their suddenly fragile futures.

Millions of families who once enjoyed the American dream of upward mobility and financial security are sliding rapidly down the economic ladder – some into poverty. Many are losing their homes along with their jobs, and telling their children to rethink college. And while today’s economic crisis has made life for middle-class households worse, the problems aren’t new. Pressure on the middle-class has been building for years and is likely to persist long after the current recession – now 14 months old – is over.

The middle class “is in crisis and decline,” says sociologist Kevin Leicht, director of the Institute for Inequality Studies at the University of Iowa.

“Between wages that have been stagnant [in inflation-adjusted terms] since the middle of the 1970s and government policies that are weighted exclusively in the direction of the wealthy, the only thing that has been holding up most of the American middle class is access to cheap and easy credit.”

No official definition of the “middle class” exists. But most Americans – except perhaps the very richest and poorest – consider themselves in that broad category, a fact not lost on Washington policy makers.

Indeed, President Barack Obama announced a 10-year budget on Feb. 28 that takes direct aim at the challenges facing America’s middle class and the growing concentration of wealth at the top of the income scale. Key elements of the plan include shifting more costs to the wealthiest Americans and overhauling health care to make it more affordable.

In further recognition of the importance of the middle-class, Obama has named Vice President Joseph R. Biden to chair a new White House Task Force on Middle Class Working Families. It will examine everything from access to college and child- and elder-care issues to business development and the role of labor unions in the economy.

“Talking about the middle class is the closest that American politicians and maybe Americans are willing to go to emphasize the fact that we have growing inequality in this country,” says Jacob Hacker, a political scientist at the University of California, Berkeley, and a leading social-policy expert. “A very small proportion of the population is getting fabulously rich, and the rest of Americans are getting modestly richer or not much richer at all.”

What’s at stake goes far beyond economics and family finances, though, experts say. “A large middle class, especially one that is politically active, tends to be a kind of anchor that keeps your country from swinging back and forth,” says sociologist Teresa Sullivan, provost and executive vice president for academic affairs at the University of Michigan and co-author of The Fragile Middle Class: Americans in Debt. What’s more, she says, “there are typical values that middle-class families acquire and pass on to their children,” and those values “tend to be very good for democracy.”

Right now, though, the middle class is under threat.

In a study of middle-class households, Demos, a liberal think tank in New York, estimated that 4 million families lost their financial security between 2000 and 2006, raising the total to 23 million. Driving the increase, Demos said, were declines in financial assets, then-rising housing costs and a growing lack of health insurance.

“In America the middle class has been a lifestyle, a certain way of life,” says Jennifer Wheary, a co-author of the study. “It’s been about being able to have a very moderate existence where you could do things like save for your retirement, put your kids through school, get sick and not worry about getting basic care. And those kinds of things are really imperiled right now.”

In another study, the Pew Research Center found this year that “fewer Americans now than at any time in the past half-century believe they’re moving forward in life.”

Among the findings:

* Nearly two-thirds of Americans said their standard of living was higher than that of their parents at the same age, but more than half said they’d either made no progress in life over the past five years or had fallen backward.

* Median household income rose 41 percent since 1970, but upper-income households outperformed those in the middle tier in both income gains and wealth accumulation. The median net worth of upper-income families rose 123 percent from 1983 to 2004, compared with 29 percent for middle-income families.

* Almost eight in 10 respondents said it was more difficult now for those in the middle class to maintain their standard of living compared with five years ago. In 1986, 65 percent felt that way.

Lane Kenworthy, a sociology and political science professor at the University of Arizona who studies income inequality and poverty, says “the key thing that’s happened” to the middle class over the past three decades “is slow income growth compared to general economic growth.” Moreover, Kenworthy says a bigger and bigger portion of economic growth has accrued to the wealthiest 1 percent, whether the measure is basic wages or total compensation, which includes the value of employee-sponsored and government benefits.

Even the economic boom leading up to today’s recession has proved illusory, new Federal Reserve data show. While median household net worth – assets minus debt – rose nearly 18 percent in the three years ending in late 2007, the increase vanished amid last year’s drastic declines in home and stock prices, according to the Fed’s triennial “Survey of Consumer Finances.” “Adjusting for those declines, Fed officials estimated that the median family was 3.2 percent poorer as of October 2008 than it was at the end of 2004,” The New York Times noted.

A hallmark of middle-class insecurity reflects what Hacker calls “the great risk shift” – the notion that government and business have transferred the burden of providing affordable health care, income security and retirement saving onto the shoulders of working Americans, leaving them financially stretched and vulnerable to economic catastrophe.

“Over the last generation, we have witnessed a massive transfer of economic risk from broad structures of insurance, including those sponsored by the corporate sector as well as by government, onto the fragile balance sheets of American families,” Hacker wrote. “This transformation . . . is the defining feature of the contemporary American economy – as important as the shift from agriculture to industry a century ago.”

The challenge of solving the problems facing the American middle class will confront policy makers for years to come. Some experts say the key is growth in good jobs – those with good pay, good benefits and good, secure futures. Others argue that solving the nation’s health-care crisis is the paramount issue.

One thing is certain, experts say: Leaving the fate of the American middle class to chance is not an option.

“We’re believers in hard work, and we’re increasingly in a situation where the difference between whether or not a middle-class family prospers comes down to luck, says Amelia Warren Tyagi, co-author of The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke. “And that’s an idea that makes us really uncomfortable.”

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In the news: Senate passes D.C. Voting Rights Bill

On February 26, 2009, the Senate passed a bill providing full voting representation in the House of Representatives for residents of the nation's capital, nearly ensuring that the measure will become law.  The measure would increase membership in the House from 435 to 437, adding a seat from the District of Columbia and also one from Utah.  The Western seat was added to help attract Republican support and because officials contended that the state was deprived of an additional congressional district through and undercount in the 2000 Census.  The House has yet to take up the measure this session but is certain to repeat its passage of the bill in previous years.  President Obama has indicated his support for giving the District of Columbia voting representation.

For a more in-depth summary, see an Overview of the issue on "D.C. Voting Rights" (April 11, 2008).

Closing Guantánamo

by Kenneth Jost, February 27, 2009

Can Obama close the detention camp within one year?

President Obama on his second full day in office ordered the closing of the Guantánamo detention camp within a year. The facility at the U.S. Naval Station in Cuba has been controversial ever since President George W. Bush decided in late 2001 to use it to hold suspected enemy combatants captured in Afghanistan and elsewhere. Both Obama and Republican candidate John McCain promised during the presidential campaign to close the facility if elected. But that poses many difficult issues about the camp’s remaining 241 prisoners. The government wants to send many to other countries – with few takers so far – but worries that some may resume hostile activities against the United States. Some may be brought to the U.S. for trial, but those prosecutions would raise a host of uncharted legal issues. Meanwhile, opposition already has surfaced to any plans for housing detainees in the United States. And human-rights advocates worry the Obama administration may continue to back some form of preventive detention for suspected terrorists.

  • Should the government continue repatriating Guantánamo detainees to other countries?
  • Should Guantánamo detainees be prosecuted in civilian courts?
  • Should some Guantánamo detainees be held indefinitely without military or civilian trial?

For a more in-depth summary, see the Overview of this week’s report.
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Overview from the issue on Closing Guantánamo (2/26/2009)

by Kenneth Jost

Mohammed Jawad has spent more than a quarter of his young life in the prison at Guantánamo Bay, Cuba, for an offense he says he didn’t commit.

The government says the Afghani teenager threw a grenade at a U.S. military jeep in Kabul in 2002, wounding two American soldiers and their Afghan interpreter.

Jawad, who was 16 or 17 at the time, claims he was working to clear land mines when the attack occurred and that another youth was responsible. Jawad says he confessed under coercion while in custody in Afghanistan and again at the U.S. detention camp at Guantánamo Bay, Cuba, only after more than a year of abusive interrogation.

Then, in a pair of rulings in October and November, an Army judge threw out the confessions that the prosecution had said were central to the case.. Col. Stephen Henley ruled that Jawad had confessed the first time only after Afghan soldiers threatened to kill him and his family. The statements made in Guantánamo, Henley said, were also coerced.

With a case so badly handled, Jawad would seem to be an obvious candidate for release from the controversial prison camp that President George W. Bush ordered to be established in 2002 for “enemy combatants” captured in the Afghanistan war or elsewhere. In its final week in office, however, the Bush administration on Jan. 13 urged the review panel that acts as an appeals court for the military commission system at Guantánamo to reverse the rulings in Jawad’s case and allow the prosecution to go forward.

After taking office only a week later, President Obama signed an executive order for a review of all pending Guantánamo cases and the closure of the facility – which now houses 241 prisoners – within one year. In Jawad’s case, however, the new administration returned to the military review panel to ask for a 120-day delay before it rules on Jawad’s case. The panel granted the request, over the objections of Jawad’s lawyers.

Obama’s action – on his second full day in office – moved toward fulfilling his repeated campaign pledge to close Guantánamo, known as “Gitmo.” Human rights advocates, who have strongly criticized Guantánamo and the legal rules the Bush administration established for enemy combatant cases, are applauding Obama’s move.

“Today is the beginning of the end of this sorry chapter in our nation’s history,” Elisa Massimino, executive director and CEO of Human Rights First, said after Obama signed the order. “The message this sends to the world could not be clearer: The United States is ready to reclaim its role as a nation committed to human rights and the rule of law.”

Even some former Bush administration officials agree the time has come to close the facility. John Bellinger, who was legal adviser at the State Department and National Security Council during the Bush administration, says he has “very strongly” supported closing this “albatross around our necks.”

“The benefits of Guantánamo have been outweighed by the legacy costs of Guantánamo, and that has been true for some time,” says Charles “Cully” Stimson, former assistant secretary of Defense for detainee affairs and now a senior legal fellow at the conservative Heritage Foundation. The facility has taken “a moral toll” on the U.S. image at home and abroad, he says.

Robert Chesney, a respected national security expert now a visiting professor at the University of Texas Law School in Austin, says Guantánamo reflects a broader failure of policy on how to deal with suspected terrorists captured both within and outside the United States since the Sept. 11, 2001, attacks on the World Trade Center and Pentagon by the Islamic terrorist group al Qaeda.

“For more than seven years, we’ve struggled to define a counterterrorism policy that is effective, that is politically sustainable and simultaneously reflects our core values as Americans,” Chesney remarked as he opened a panel discussion at the school on Feb. 3. “We have not yet succeeded in doing this.”

Despite indications of editorial and public support for Obama’s action, Republicans are raising questions and apparently setting the stage to criticize the closure if suspected terrorists are transferred to facilities within the United States. “Most families neither want nor need hundreds of terrorists seeking to kill Americans in their communities,” House GOP Whip Eric Cantor of Virginia said in a statement issued the same day.

Another critic, however, notes that Obama’s executive order did nothing other than promise a review of case files and set a goal of closing the facility. “He hasn’t really done much,” says Andrew McCarthy, legal editor of National Review and chairman of the Center for Law and Counterterrorism at the Foundation for the Defense of Democracies.

McCarthy has backhanded praise for the interim nature of Obama’s move, which he says contrasts with candidate Obama’s “demagogic, overheated rhetoric” during the campaign. “What he has obviously found is that there are very difficult issues, very complex issues that have to be worked through with respect to the detainees,” McCarthy says.

“It was unfortunate that he and people who are like-minded were critical of Guantánamo,” McCarthy adds, “when in point of fact if you didn’t have Guantánamo, you would need to have something like it, whether it was inside the United States or outside.”

In establishing Guantánamo, President Bush said the camp would be used to house “the worst of the worst” suspected terrorists. But the national security and human-rights camps diverge on how to regard the 779 prisoners who have been held at Guantánamo over its seven-year history, some 540 of whom have been released. Among the detainees still being held, Bellinger predicts the Obama administration will find “a lot of bad people left, or at least many in the gray area.”

“We’ve known all along that not everyone held at Guantánamo had any business being held there at all,” counters Sharon Bradford Franklin, senior counsel with the Constitution Project, an advocacy group that seeks to find consensus on constitutional issues.

Outside government, the most extensive study of the Guantánamo detainees appears to have been conducted by Benjamin Wittes, a senior fellow at the Brookings Institution think tank and author of a highly regarded new book on counterterrorism policies, Law and the Long War. Wittes writes that his examination of the information publicly available on the detainees indicated many of them had incriminating ties to al Qaeda. An updated compilation by Wittes available on the Brookings Web site, however, shows that only a small fraction of the prisoners still being held are considered major al Qaeda leaders.

Paradoxically, Obama’s pledge to close Guantánamo appears to be contributing to an increase in tensions in the prison camp. A special Defense Department review team that spent almost two weeks at Guantánamo concluded in February that detainees are being treated humanely in compliance with the provisions of the Geneva Conventions regarding wartime captives. But the report noted a nearly sixfold increase in disciplinary incidents by detainees since September 2008 and tied the increase in part to detainees’ “uncertainty and anxiety about the future.”

Along with Guantánamo, the Obama administration inherits an array of legal proceedings. Obama’s order froze proceedings in the military tribunal system, which thus far has secured three convictions: Ali Hamza Ahmad Suliman al-Bahlul, Osama bin Laden’s alleged media secretary, was found guilty of 35 counts relating to support of terrorism and sentenced to life in prison; Salim Ahmed Hamdan, bin Laden’s former driver, was convicted on reduced charges; and David Hicks, the so-called Australian Taliban, pleaded guilty to one count of providing material support of terrorism. He and Hamdan were essentially sentenced to time served and have since been released. But pending cases in federal courts up to and including the Supreme Court are continuing.

The high court is scheduled to hear a case on April 22 testing whether the government can hold without trial a Qatari native – Ali Saleh Kahlah al-Marri – as an enemy combatant after he was arrested while lawfully residing in the United States on a student visa. In a closely divided ruling, the federal appeals court in Richmond, Va., said yes – but with more judicial scrutiny than proposed by the Bush administration. In one of its first moves, the Obama administration asked for and was granted an extension of time to file the government’s brief with the high court.

In a separate case, the federal appeals court for the District of Columbia is reconsidering whether former Guantánamo detainees can sue government officials for alleged torture and religious discrimination. The Supreme Court sent the case back to the appeals court in December to consider the impact of the justices’ decision in June that Guantánamo detainees can use federal habeas corpus to challenge their confinement.

The pending cases are forcing the Obama administration to make policy decisions sooner than the one-year timetable outlined for closing Guantánamo, according to Chesney. “There will not be as much new time as the administration would like,” Chesney said at the panel discussion.. “The litigation calendar will force them to take positions much faster than that.”

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