The bankruptcy bill currently pending in the Senate is not something I've discussed much. To be honest, a big part of me feels that with much bigger blogs on the case, who wants to hear what I have to say about it? I'd much rather focus my attention on issues that aren't getting as much attention, like Santorum's minimum wage annihilation.
Everyone from the centrist New Republic to the far more liberal Paul Krugman have called this bankruptcy bill for what it is -- a sop to the credit card industry with no basis in sound policy.
Bankruptcy laws are supposed to balance the interests of creditors with debtors as well as balance society's interest in encouraging people to take risks (such as taking out a loan to start a business) with its interest in ensuring that the risks they take are not foolish ones (such as borrowing money to play the ponies). U.S. bankruptcy laws have generally done a good job of striking this balance and have thus contributed to an economy that is among the most entrepreneurial in the world. What's more, they have codified a progressive and long-standing American value: the belief in second chances.
By these measures, the bankruptcy bill is a catastrophe. Under the current system, bankruptcy courts have broad discretion to decide who can file for Chapter 7, which allows debtors to erase their obligations after forfeiting a state-determined percentage of their remaining assets, and Chapter 13, which requires strict repayment according to court-ordered schedules. Judges base their decisions as much on why the debt was accrued as on income; this way people who come into debt through no fault of their own can get a fresh start, while a judge can decide that a careless gambler must pay what he owes. But the new bill would replace judicial discretion with a means test on household income--those above a certain level would be forced to file for Chapter 13 bankruptcy--dismantling the system's ability to discriminate among worthy and unworthy debtors.
The bankruptcy bill was written by and for credit card companies, and the industry's political muscle is the reason it seems unstoppable. But the bill also fits into the broader context of what Jacob Hacker, a political scientist at Yale, calls "risk privatization": a steady erosion of the protection the government provides against personal misfortune, even as ordinary families face ever-growing economic insecurity.
The bill would make it much harder for families in distress to write off their debts and make a fresh start. Instead, many debtors would find themselves on an endless treadmill of payments.
The credit card companies say this is needed because people have been abusing the bankruptcy law, borrowing irresponsibly and walking away from debts. The facts say otherwise.
A vast majority of personal bankruptcies in the United States are the result of severe misfortune. One recent study found that more than half of bankruptcies are the result of medical emergencies. The rest are overwhelmingly the result either of job loss or of divorce.
To the extent that there is significant abuse of the system, it's concentrated among the wealthy - including corporate executives found guilty of misleading investors - who can exploit loopholes in the law to protect their wealth, no matter how ill-gotten.
One increasingly popular loophole is the creation of an "asset protection trust," which is worth doing only for the wealthy. Senator Charles Schumer introduced an amendment that would have limited the exemption on such trusts, but apparently it's O.K. to game the system if you're rich: 54 Republicans and 2 Democrats voted against the Schumer amendment.
Other amendments were aimed at protecting families and individuals who have clearly been forced into bankruptcy by events, or who would face extreme hardship in repaying debts. Ted Kennedy introduced an exemption for cases of medical bankruptcy. Russ Feingold introduced an amendment protecting the homes of the elderly. Dick Durbin asked for protection for armed services members and veterans. All were rejected.
So there you have it. The majority of the Democrats in Congress tried to block a bill that helps no one but the credit card companies. The Republican majority, along with select Democratic partners, blocked any effort to soften the blow the bill is set to deliver to the sick, the elderly, and members of the armed forces.
The theory among Democrats who are going along with this bill seems to be that if they filibuster it instead, they will be giving the GOP ammunition to call them obstructionists down the line. Well, score one for Frank Luntz and the GOP message machine. Wake up, Biden, Carper, Landrieu, Lieberman, et al! Look at what the GOP is doing to the AARP after that organization went along with them on Medicare, with the intention of storing up their criticism to fight off Social Security privatization. There is no loyalty. There is no credit for cooperation. Sadly, the lesson learned is that the only prize for working with this White House is a knife in the back the minute you go off message.
I'm not saying that if the White House says it, it's automatically wrong. What I'm saying is that if you're looking to choose your fights, stick to your guns on the fights that matter. We were going to lose this fight, but that doesn't mean it didn't deserve to be fought. This is exactly the type of crap that cost the Democratic Party the White House in 2000, sending hoardes of liberals who honestly care about bread-and-butter economic issues into the Nader camp.
The vote will be held today. It will pass. It will be a victory for the credit card companies and a loss for working families. And any Democrat who doesn't go down with guns blazing ought to ask themselves exactly why he or she is a Democrat.
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A quick side note on another issue I haven't been dealing with. I couldn't care less that Bush has nominated John Bolton to become the next ambassador to the UN. He's said a ton of things that would indicate that the doesn't have the slightest respect for the UN or the rest of the world in general.
So what? Isn't that basically the administration's position? I'd rather they be honest about it than put up an ambassador who's sole role would be playing 'good cop' to a White House full of 'bad cops'.
And the argument that Bolton is too partisan for the position? Give me a break! Name an appointment that hasn't been filled by a serious Bush partisan.
Yes, I really am this jaded.
posted by Scott |
3/08/2005 |
| Monday, March 07, 2005
If you asked me for one reason that I'm a Democrat, my answer would be 'workers' rights'. The vibrant labor movement and the overwhelming public demand for fundamental rights for workers in the Twentieth Century made this nation what it is today. I would argue that the rollback of those rights (pun most certainly intended) has been doing serious damage to the American economy, the effects of which will probably not be fully felt until it's too late to fix the problem.
So when I heard a few days ago that Pennsylvania Senator Rick Santorum was trying to put together a deal in which a $1.10 hike in the minimum wage would be tied to an elimination of the minimum wage for any business with less than $1 million in revenues (business with less than $500,000 are currently exempt), I was horrified. Essentially, this would mean a $1.10 per hour increase for 1.2 million workers and a loss of minimum wage protection for 6.8 million workers. In other words, it's bad news for a net 5.6 million workers.
Nathan Newman, writing at his fantastic Labor Blog, picks up on one part of Santorum's bill that I hadn't noticed, even though it addresses an issue near and dear to my heart.
Banning State Minimum Wage Laws: But here's a kicker from a GOP supposedly dedicated to states rights. Santorum's bill would ban states from requiring employers to pay tipped workers with a guaranteed wage. Employers could pay tipped workers nothing and force them to live off tips, while states would be preempted from creating a higher wage standard for tipped workers.
The federal Fair Labor Standards Act specifically guarantees states the right to impose higher wage standards than the federal law. One area where many states have a higher standard than federal law is for tipped workers, who are guaranteed only $2.13 per hour in wages under federal law and can be forced to credit their tips against the required federal wage level. Many states have a higher minimum wage for tipped workers or have abolished the so-called "tip credit" altogether and let workers keep their tips, without allowing employers to reduce their salary below the regular minimum wage level.
With Santorum's bill as law, you would end up with a situation where small and even medium size restaurants and other businesses with tipped employees would be exempt from the federal minimum wage, and state governments would be barred from requiring employers to pay actual wages to tipped workers. Essentially, those workers could be hired for zero dollars and told they had to live only off tips, however little those were.
As I've mentioned here before, my first job in high school was waiting tables at an a ice cream & burger chain (extra credit for any commenter who thinks they might know which one I'm talking about). I made $2.13-an-hour, plus tips. Mind you, when people are ordering a burger and a milkshake, it doesn't matter how good the service is or how nice you are or how many times you ask them if they need anything -- they don't tip well. Hell, unless they want to tip 30%, they can't even tip well.
The chain I worked for, I'm reasonably certain, would not be exempt from paying their wait staff the $2.13 waiter/waitress wage. However, that's only because it was a chain. If it had been a run-of-the-mill greasy spoon/diner/dive, I would not be at all surprised to learn that their revenues wouldn't quite make the $1 million level. And the management of said restaurant would be allowed, thanks to Rick Santorum, to make their wait staff work for tips.
I can hear some of you now. "They can go work someplace else." Really? I think of the fifty year old waitress in Murdo, South Dakota who works at one of the town's only businesses, the local diner. What kind of qualifications does she have to go get another job? And where exactly is she supposed to work? Google map Murdo. Is she supposed to drive 126 miles so she can work at the Applebee's in Rapid City?
Rick Santorum is that rare Republican who reminds me why I'm a Democrat every time he opens his stupid mouth.
posted by Scott |
3/07/2005 |
| Sunday, March 06, 2005
When I was a very young child, I was scared to death of communists. No, really. Even in the early eighties, I was under the impression that communists -- Soviet communists, to be exact -- wanted me dead. They would like nothing more than to kidnap me, bring me back to Russia, and -- best case scenario -- brainwash me, or -- worst case scenario -- kill me. I have absolutely no idea why I thought this. It was totally irrational and, in retrospect, with such an atmosphere of detente and friendship, completely counterintuitive.
Eventually, I grew out of this silly fear, but kept the disdain for communism. Even so, I was fascinated by it. Sort of like hating snakes but wanting to know as much about them as you possibly can. Does that make sense?
Anyway, sometimes I forget that communist propaganda still exists in a non-historical context. When I think about North Korea, I don't think 'communist' so much as I think 'nuclear powered, batshit crazy personality cult'. Thanks to one of my favorite websites, BoingBoing.net, I am reminded that NK is indeed cut from the same mold as the nightmare vision Soviet Union of my childhood fears. But now, they're trying to soften that image... with tourism.
The fine folks at the aforementioned BoingBoing.net have posted a Flash commercial the North Korean government is using to promote its annual Korean Friendship Association trip to the Democratic ahem People's Republic of Korea. It's a pretty large file, but definitely worth a look for both the humor factor and the photos of present-day North Korea. There's also a pretty funny running commentary at BoingBoing about some dealings with and impressions of North Korea. I highly recommend it.
So this is what you get after a week of me being sick and posting lightly -- North Korean propaganda. I hope you enjoy it in the eye-rolling spirit I did. I'll be back shortly with some real blogging.
posted by Scott |
3/06/2005 |
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