The H-1B Prevailing Wage is Substantially Below the Median Wage of U.S. Workers

The H-1B Prevailing Wage is Substantially Below the Median Wage of U.S. Workers

Sacramento, CA (PRWEB) July 6, 2006 -- The Programmers Guild, an organization advocating for US-based computer professionals, finds that the prevailing wage protections in pending immigration legislation, such as the "SKIL Bill," authorize corporations to pay foreign tech workers $25,000 below the wage paid to average U.S. workers in the same professions.
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Proponents of the H-1B program argue that H-1B workers are the "best and brightest" workers in the world, bringing specialized skills that U.S. workers lack. But if wages are an indication of value, the opposite is true: In Silicon Valley only 16% of H-1B workers are earning at least what an average American programmer earns, and this ratio holds across the U.S.

In Fiscal Year 2005 the Department of Labor certified that H-1B computer programmers in Silicon Valley earning as low as $40,000 per year, and these wages were found to be in compliance with prevailing wage requirements by both the DOL and the GAO.
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Thus, even if the H-1B worker possesses a PhD, if the job they are filling does not require an advanced degree, DOL directs employers to utilize Wage Level One as their prevailing wage.

The DOL wage level worksheet is here:

Reference: www.flcdatacenter.com/download/PW_Guidance_2005_Mar_01_App_B_C.pdf

Step 1: Enter Wage Level 1

Step 2: If the years of experience are GREATER THAN the low-end O*NET (e.g., more than 2-4 years), add a 1, 2, or 3 as appropriate.

Step 3: If the required education is GREATER THAN a BS degree, add 1 or 2 as appropriate.

Step 4: If the job requires special skills or licensing BEYOND what the profession normally requires, add a 1 or 2 as appropriate.

Step 5: If the job includes SUPERVISORY duties, add 1.

SUM: For an average job requiring average skills and education, DOL instructs employers to use wage level 1
DOL's "prevailing wage" that is $25,000 below the wages of average-skilled U.S. workers in the same job classification is a sham. Congress, DOL, and GAO should defend how wages at the 3rd to 17th percentile of what average U.S. workers earn are "prevailing wages," or they should fix the problem within their pending H-1B legislation. ...

computer science enrollments are dropping ... "They don't believe in the job market in computers anymore,"

Students saying no to computer science | By Ed Frauenheim | Staff Writer, CNET News.com Published: August 11, 2004 4:40 PM PDT

At the Massachusetts Institute of Technology, as in other schools across the country, computer science enrollments are dropping, raising questions about the country's future tech leadership.

This fall, there are just under 200 new undergraduate majors in MIT's electrical engineering and computer science department, down from about 240 last year and roughly 385 three years ago.

The Rutgers University computer science department has canceled some course sections and expects total enrollment in classes in the major this year to be thousands less than its peak of 6,500 several years ago. Saul Levy, chair of the undergraduate computer science program, said the ongoing decline stems from the way students perceive career prospects.

"They don't believe in the job market in computers anymore," Levy said.

At Carnegie Mellon University, 2,000 students applied to the school of computer science this year, down from 3,200 in 2001. At the University of California at Berkeley, the number of computer science majors pursuing a bachelor of arts degree was 226 this spring, down from 240 in the spring of 2003. Across the bay at Stanford University, the number of computer science undergraduate majors has declined for the past four years, from 171 in the 2000-2001 year to 118 this past year. ...
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A recent study from the Rand think tank concluded that a labor shortage isn't looming in tech-related fields in the United States. "Despite recurring concerns about potential shortages of (scientific, technical, engineering and mathematics) personnel in the U.S. work force, particularly in engineering and information technology, we did not find evidence that such shortages have existed at least since 1990, nor that they are on the horizon," the report said.

Nationwide numbers for undergraduate enrollments in computer science departments this fall were not available. But a survey of Ph.D.-granting computer science departments in the United States by the Computer Research Association found that the number of new undergraduate majors in the field dropped 18 percent last year. ...

Study: Health Insurers Are Near-Monopolies

Study: Health Insurers Are Near-Monopolies | Tuesday, April 18, 2006 by the Associated Press

Consolidation among health insurers is creating near-monopolies in virtually all reaches of the United States, according to a study released Monday.

Data from the American Medical Association show that in each of 43 states, a handful of top insurers have gained such a stronghold that their markets are considered "highly concentrated" under U.S. Department of Justice guidelines, often far exceeding the thresholds that trigger antitrust concerns.

The study also shows that in 166 of 294 metropolitan areas, or 56 percent, a single insurer controls more than half the business in health maintenance organization and preferred provider networks underwriting.

"This problem is widespread across the country, and it needs to be looked at," said Jim Rohack, an AMA trustee and physician in Temple, Texas. "The choices that patients have now are more difficult."

The AMA study cited a Justice Department benchmark in citing antitrust concerns, the Herfindahl-Hirschman Index, or HHI. A score above 1,000 shows "moderate" concentration. Those scoring above 1,800 yield a "high" concentration.

Figures show that 95 percent of the 294 HMO/PPO metropolitan markets studied were above 1,800. Raise that HHI bar even higher to 3,000, and 67 percent rise above it.

The AMA study is the latest piece of evidence — and most comprehensive to date — showing the market power of a few companies, and a large number of regional nonprofit Blue Cross operations, is formidable and growing. And it comes as premiums continue to grow at near double-digit percentage rates.

Critics say that carriers are not only creating monopolies and oligopolies in many regions, they also control the other side of the equation in what is known as monopsony power. That means in addition to having the most enrollees, they're also the biggest purchasers of health care and can dictate prices and coverage terms. ...

The Republican Erosion of America ... 235,000 manufacturing jobs lost in Ohio ... 1650 payday extortionists ....

The Republican Erosion of America : Information Clearing House - ICHBy Angel Of Mercy | 26/04/08 "Daily Kos"

Historical fact: Prior to the rise of the radical right some 30 years ago, America was the most innovative, most prosperous, most vital nation on the face of the Earth. And it wasn't just an obscenely rich fraction of one percent skewing the numbers, either...like it is today. Broad-based, bottom-up prosperity--in which liberal Democratic administrations specialize--really DID lift all boats. Lean in close and let me whisper to you an uncomfortable truth that the GOP will never dare mention...

Republicans are the rogues and rapscallions who took a hearty, robust economy that was the envy of the entire world and ran it into the ground. I'm not merely talking about the current fiscal catastrophe that is looming before us; no, I'm concerning myself here more with how we got this way, how the cheap-labor conservatives conspired, deliberately and with malice aforethought, to lay us low...for that is precisely what they did.

Follow me down and I'll show you how...
Did you know that ALL recessions since the 1930's, save one, have taken place under Republican presidents? True fact. The single exception occurred at the conclusion of World War II during the administration of Harry S. Truman and it was one predictable consequence of ending a war. It was also the shortest, as well as the shallowest. Contrast that with the fact that we are now enduring our SECOND recession due to the gross mismanagement of that congenital idiot and the band of thugs in his administration. ...
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Among the things for which I despise Wal-Mart, its very success is perhaps the biggest. These are rapacious people, the embodiment of avarice. The Walton family has more money than Midas...and it's not enough!! Furthermore, their Republican allies in government have steadily and relentlessly undermined the Middle Class to the extent that they very nearly have no other choice about where to shop. This isn't the result of globalization that we're talking about here, it's the end product of 3+ decades of deliberate GOP class warfare in their pre-meditated attempt to eradicate all those popular benefits of liberal policies that WORKED, policies like the New Deal, the Great Society and the War on Poverty. This is no accident.
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Departure of the steel industry has turned Youngstown, Ohio into a hopelessly low-income ghost town just as the passing of the rubber industry did to Akron, Ohio. The Cleveland Plain Dealer reported that a total of 235,900 manufacturing jobs were lost in just that one state between 2000 and 2007. ...
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Borrowing against the receipt of one's next check certainly qualifies as payday lenders typically charge an annual interest rate in the 300-400% range...and that's EXCLUDING fees and penalties. If you've taken out a loan for $300, for example, with a due date two weeks in the future, paying back that loan may well eat up most or all of your forthcoming paycheck...and your payday then becomes THEIR payday! And what exactly do you live on in the meantime? A recent study quoted here found that the average payday loan sucker takes out EIGHT loans in a given year and ultimately pays $800 for that $300 loan! And back in impoverished Ohio, an umbrella group representing some 600 nonprofit agencies found that the state is home to over 1650 payday extortionists, more than all of Ohio's McDonald's, Burger Kings and Wendy's franchises PUT TOGETHER. That's just wrong. ...

PBS breaks ‘media blackout’ of NYT story on Pentagon propaganda ... Fox news, CNN, MSNBC, CBS, ABC< NBC silent

Think Progress | PBS breaks ‘media blackout’ of NYT story on Pentagon propaganda.»

On Sunday, The New York Times published an explosive report exposing the Pentagon’s secret campaign to use analysts in order to “generate favorable news coverage of the administration’s wartime performance.” Since that time, TV news organizations have largely been silent on their role in the propaganda. Ari Melber notes that last night, PBS’s Newshour finally broke this blackout, but couldn’t convince the other networks to participate:

JUDY WOODRUFF: And for the record, we invited Fox News, CNN, MSNBC, CBS, ABC and NBC to participate, but they declined our offer or did not respond. ...

U.S. households now owe almost $14 trillion, nearly equal to the annual output of the U.S. economy

Household Debt Goes Through The Roof | By Michael Mandel

... U.S. households now owe almost $14 trillion, nearly equal to the annual output of the U.S. economy.
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Borrowing Shifts Into Overdrive

A family that is paying 18.9% on a balance of $8000 has a lot less money left over for basic purchases

Credit Slips: The Stimulus that Can't Stimulate
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How are Americans planning to spend their stimulus checks? According to a new poll, fully 41% say they will use their rebates to pay down debts. Another 19% are trying to protect themselves by saving it, so that 60% have no spending plans at all. Only 7% describe new spending. Debt is blocking a large part of any impact the stimulus package might have had.

[The rest of the breakdown: 17% will spend it on "ordinary expenses," presumably what they would have bought anyway. No, the numbers don't add to 100%--I assume they left out 16% non-responses and didn't knows.]

Why is paying down debt the number one objective of the tax rebate? Take a look at at a BusinessWeek graphic that shows how consumer debt increased 2000-2007 at a rate much higher than in the 1990s. While you are there, read the article on the powerful contraction occurring in consumer spending.

Debt is crowding out consumer spending. A family that is paying 18.9% on a balance of $8000 has a lot less money left over for basic purchases, much less any money to buy anything new. ...
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Posted by: Patches | April 15, 2008 at 01:53 PM

I'm no economist, but it seems to me that American business is now reaping what it's been sowing for years by refusing to share profits with its workers through higher wages. Consumer spending kept chugging nevertheless because of easy credit and the housing bubble, which allowed people to pull the equity out of their homes and keep spending, even though their wages were flat. Guess what? Now the housing bubble has burst, the equity is gone and the credit cards are maxed out. With prices of necessities rising, that flat paycheck can barely cover them (if that). The consumer economy is built on encouraging the purchase of "wants"---buying only "needs" won't support it. And there's no money left for "wants" anymore. Corporate America's chickens are coming home to roost.

Connecticut poor pay more of income on taxes, than rich

Report: Connecticut poor pay more of income on taxes, than rich | Posted Apr. 15, 2008 | 7:04 AM

New Haven (AP) -- A new report shows Connecticut's middle class and poor families pay a higher percentage of their income in state sales and local taxes than the wealthiest families.
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Middle-class families pay 9.6 percent of their income in state and local taxes. The report shows the poorest 20 percent pay 10.9 percent.
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Opponents of increasing taxes for Connecticut's wealthiest families city state figures show the top 5 percent of Connecticut taxpayers pay more in state income taxes than the bottom 95 percent combined. ...

1 out of 3 American children are worse off than their parents were at their age ... bottom 20% lost 2.5% in income over 20 years

Rich getting richer: Campaign issue?Studies show that the rich are getting a lot richer, the poor a little poorer. The middle class is slipping. | By David R. Francis | columnist | from the April 14, 2008 edition

The latest study of income inequality in the United States, released last week, confirms that trend. It finds that since the late 1990s, despite several years of reasonable economic growth, the bottom 20 percent of families actually lost 2.5 percent in their average income by 2005, while the top 20 percent of American households enjoyed a 9 percent rise. Those in the middle fifth got a 1 percent hike in inflation-adjusted incomes.
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... In 37 states, from the late 1980s to the middle of the current decade, the richest fifth of families got an average $36,300 boost in their annual income while the poorest fifth got just $1,600. In terms of purchasing power, the annual income of the poorest families increased only $93 by the end of the period (To see the study, visit www.cbpp.org.)

Another study, by the Congressional Budget Office, using tax data, calculates that the share of national after-tax income going to the top 1 percent of households more than doubled, from 7.5 percent in 1979 to 15.6 percent in 2005. In 2005 alone, the $180,000 average income gain for these rich households was more than three times the average middle-income household's total income.

An academic look at increasing income polarization, written by economists Emmanuel Saez of the University of California, Berkeley, and Thomas Piketty of the Paris School of Economics, found that average incomes of the highest-earning 1 percent grew 11 percent year-over-year between 2002 and 2006. The bottom 99 percent saw their incomes grow on average just 0.9 percent annually.
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Conservatives tend to think the economic system is fair, rewarding the deserving properly. Americans have generally been tolerant of unequal outcomes, since most believe opportunities to get ahead are abundant and that hard work and skill are well rewarded, as Isabel Sawhill, of Washington's Brookings Institution notes.

But she questions these assumptions, citing a Brookings study released in February that found that 1 out of 3 American children are worse off than their parents were at their age. It also noted that intergenerational economic mobility in the US is worse than in Canada and the Scandinavian countries, and even lower than in France and Germany with their aristocratic heritages. ...

Richest 1% get $491B in tax cuts ... same as debt to Chinese ... lowest 99% get $3.74 in debt for each $1 tax relief ...

Tax Day Gifts for the Richby Holly Sklar | http://www.opednews.com

When it comes to cutting taxes for the wealthy, President Bush can truly say, "Mission accomplished."

The richest 1 percent of Americans received about $491 billion in tax breaks between 2001 and 2008. That's nearly the same amount as U.S. debt held by China -- $493 billion -- in the form of Treasury securities.
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The International Monetary Fund says the United States is in the worst financial crisis since the Great Depression. Yet, we are borrowing money with interest to finance tax cuts for Wall Street executives.

For Americans below the top 1 percent, the tax cuts have been a giant swindle. The bottom 99 percent of taxpayers were left with a bill of $3.74 in debt for every $1 in federal tax cuts from 2001 to 2006, reports Citizens for Tax Justice. Only the top 1 percent came out ahead.
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Most households aren't even earning as much as they did in 1999, adjusting for inflation. But the 400 taxpayers with the highest incomes doubled their incomes between 2002 and 2005.

According to the latest IRS data, which excludes tax-exempt interest income from state and local government bonds, the richest 400 taxpayers reported an average $214 million each on their federal income tax returns in 2005 -- up from $104 million in 2002.
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Thanks to tax cuts, it's now common for the nation's richest bosses to pay taxes at a lower rate than workers. The 400 richest taxpayers paid only 18 percent of their income in federal individual income taxes in 2005 --- down from 30 percent in 1995.

"The drop in effective tax rates for the top 400 filers," the Center on Budget and Policy Priorities reports, "worked out to a tax reduction of $25 million per filer in 2005." It would take 673 average workers earning $37,149 a year to reach $25 million today.
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Gas prices rise to another record as refiners cut production to boost margins - Yahoo! Canada Finance

Gas prices rise to another record as refiners cut production to boost margins - Yahoo! Canada Finance | Fri Apr 4, 4:44 PM | By John Wilen, The Associated Press

NEW YORK - Retail gas prices in the United States surged to a new record above US$3.30 a gallon Friday and appear poised to rise further in coming weeks as gasoline supplies tighten.
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That's because gasoline supplies are falling, in part because producers are cutting back on output of the fuel due to the high cost of crude - the more expensive crude is, the more refiners have to pay and the lower their profits are. They're also in the process of switching over from producing winter grades of gasoline to the less polluting but more expensive grade of fuel they're required to sell in the summer.

"That cuts back on some of the supply and helps to pump up the price," said Mike Pina, a spokesman for AAA. ...

U.S. Economy Shed 80,000 Jobs in March - New York Times

U.S. Economy Shed 80,000 Jobs in March - New York Times | By REUTERS |Published: April 4, 2008

WASHINGTON (Reuters) - U.S. employers cut payrolls for a third month in a row in March, slashing 80,000 jobs for the biggest monthly job decline in five years as the economy headed into a downturn, government data on Friday showed.

The Labor Department revised the first two months of the year's job losses to a total of 152,000 from a previous estimate of 85,000. The March unemployment rate jumped to 5.1 percent from 4.8 percent, the highest since a matching rate in September 2005.

The March job report was more bleak than expected. Economists polled ahead of the report forecast a decline of 60,000 in non-farm payrolls and a rise in the unemployment rate to 5 percent. ...

U.S. chief auditor leaves, giving dire warning about national debt

U.S. chief auditor leaves, giving dire warning about national debt | By David S. Broader | 16/03/08 "Washington Post"
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As the head of the Government Accountability Office, the auditing arm of Congress, Walker has been perhaps the most outspoken official in Washington warning of the fiscal train wreck that awaits this country unless it mends its ways.

The budget resolutions approved last week both envisage an increase in the deficit next year. The Senate predicts $366 billion, the House $340 billion. Meanwhile, over the next five years, independent estimates are that the national debt, already $9 trillion, will grow by $2 trillion more. Almost half the government debt owed to banks or individuals is held by foreign creditors, notably China, Japan and the OPEC nations, up from 13 percent five years ago.

Both resolutions forecast a balanced budget in 2012, but they use the same dubiously optimistic assumptions President Bush employed to make the same claim for his tax-and-spending proposal. Once again, the hard choices are being pushed off to some hazy future.

For much of his nine years as comptroller general, and with increasing urgency in recent times, Walker has been warning policymakers in Washington and audiences around the country that this nation is courting disaster by not paying its bills.

Last week, he cautioned in a speech that "largely due to the aging of the baby boomers and rising health care costs, the United States faces decades of red ink. . . . If the United States continues as it has, policymakers will eventually have to raise taxes or slash government services that U.S. citizens depend on and take for granted. . . . Over time, the U.S. government could be reduced to doing little more than mailing out Social Security checks to retirees and paying interest on the massive national debt."

Even as a nonpartisan employee of Congress, Walker has been blunt enough to say, again and again, that "at both ends of Pennsylvania Avenue and on both sides of the political aisle, there are too few leaders who face the facts" about this fiscal mess. ...

past few years, the middle class — for the first time on record — failed to grow with the economy

Losing Our Will - New York Times | By BOB HERBERT | Published: April 12, 2008

The economic boom so highly touted by the president and his supporters “was, for most Americans,” said Mr. Leonhardt, “nothing of the sort.” Despite the sustained expansion of the past few years, the middle class — for the first time on record — failed to grow with the economy.

And now, of course, we’re sinking into a nasty recession.

The U.S., once the greatest can-do country on the planet, now can’t seem to do anything right. The great middle class has maxed out its credit cards and drained dangerous amounts of equity from family homes. No one can seem to figure out how to generate the growth in good-paying jobs that is the only legitimate way of putting strapped families back on their feet.

The nation’s infrastructure is aging and in many places decrepit. Rebuilding it would be an important source of job creation, but nothing on the scale that is needed is in sight. To get a sense of how important an issue this is, consider New Orleans.

The historian Douglas Brinkley, who lives in New Orleans, has written: “What people didn’t yet fully comprehend was that the overall disaster, the sinking of New Orleans, was a man-made debacle, resulting from poorly designed levees and floodwalls.”

Other nations can provide health care for everyone. The United States cannot. In an era in which a college degree is becoming a prerequisite for a middle-class quality of life, we are having big trouble getting our kids through high school. And despite being the
wealthiest of all nations, nearly 10 percent of Americans are resorting to food stamps to maintain an adequate diet, and 4 in every 10 American children are growing up in families that are poor or near-poor.

The U.S. seems almost paralyzed, mesmerized by Iraq and unable to generate the energy or the will to handle the myriad problems festering at home. The war will eventually cost a staggering $3 trillion or more, according to the Nobel Prize-winning economist Joseph Stiglitz. When he
was asked on “Democracy Now!” about who is profiting from the war, he said the two big gainers were the oil companies and the defense contractors. ...

wholesale destruction of their own economies and, eventually, their own financial "system" ... destroyed personal savings and created massive indebtedness.

Apr 10, 2008 | The Black Death of financial
collapse | By James Cumes
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Rational economics based on real investment, productivity and production died in favor of speculative and often Ponzi pretensions. The cowboy junk-bond merchants of the 1980s metamorphosed into respectable, mostly young and usually idolized financial wizards who "perfected" sophisticated, highly complex credit devices. From the 1990s, these highly leveraged instruments took the form of derivatives, private-equity, hedge-fund and mortgage securities, abbreviated to CDOs, SIVs and the rest.
Allied with "free" markets, deregulation and the uninhibited flow of all kinds of finance, those financial devices destroyed industries and the jobs that go with them. With casual indifference, they also destroyed the self-reliant working and middle classes until then typical of robust free-enterprise economies.



Theirs was not Joseph Schumpeter's "creative destruction" but wholesale destruction of their own economies and, eventually, their own financial "system". They destroyed personal savings and created massive indebtedness. They undermined the power and security of the United States itself as they "outsourced" real economic strength and stability to countries especially in Asia.



The Asian Tigers, China and others grew into "powerhouses" whose creation, historically, would otherwise have taken them generations. Our eminently creditable aim of peaceful change through development of developing economies was distorted, largely through negligent inadvertence, into financial, economic and social self-destruction. Looming global collapse, with political and strategic uncertainties, are our inevitable legacy.



Consumerism rages, industry gutted

The speculative, Ponzi mania spread especially to Anglo-Saxon countries and to other developed countries in lesser degree. Australia took to "free" markets, "free" trade, free-floating currencies, deregulation, privatization, globalization, derivatives, hedge funds, private equity, wildcat mortgages and leverage-without-limit as a duck to water. Consumerism raged. Industry was gutted. Debts ballooned. The value of the currency fell at home and abroad. Despite low-cost imports, inflation flourished. In 2008, the Australian dollar can perhaps buy as much in real terms as five or 10 cents did in 1969.



A situation in which real public and private investment was replaced by "ownership investment", massive leverage and speculative finance, in which consumption grew and debts spread, could not persist, except so long as ever more money flooded in to support the insupportable. Once the flood slowed or stopped, a Ponzi-type collapse was inevitable.



But few saw it that way. Warren Buffet belatedly called derivatives weapons of mass destruction; but most saw the financial devices as belonging to a "new era". They represented a "new paradigm". Far from being a threat to stable growth in a stable financial system, they "spread risk" and made everyone more secure and of course more wealthy.



The wealth effect was a particular feature of the residential mortgage business. Funds were available from many new banking and non-banking sources, including hedge funds and private equity, as well as pension and mutual funds; and sources that, in their magnitudes, were new, such as the carry trade. Funds marketed wholesale and retail mortgages. Liability could be shifted even or especially for debt in the deepest sense sub-prime. Mortgages also enabled homeowners to expand consumption through mortgage-equity withdrawals (MEW).



In a real sense, MEWs were symptomatic of multitudes of individuals - and, in effect, whole societies - high-living it off their capital. That enabled a process of growth that was both irresistible and inherently unsustainable. ...

least impressive expansion since WWII: lower median income, big debt increase

Hale "Bonddad" Stewart | The Bush Boom Was a Complete Bust | Posted April 6, 2008
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... the reality is it was the least impressive expansion since WWII. Below I will explain why.

Before I move forward, let me address specifically any readers who still think the last expansion was "the Greatest Story Never Told." I am going to use facts to demonstrate why the latest expansion was terrible. If you don't like the facts please feel free to present you own facts. In fact, please do so. But please only use facts from reliable sources. Reliable sources would be the government agencies that collect and present this data. To sit at this table, you must bring data (properly adjusted for inflation) that is from sources used by all economists not from sources whose credibility is non-existent.

Let's start with the consumer side of the equation. First , job growth during this expansion is the weakest of any recovery since WWII. (This information comes from the National Bureau of Economic Research and the Bureau of Labor Statistics)

As a result, real median household income (income adjusted for inflation) is now lower than it was at the beginning of this expansion (this is the first time this has happened in 40 years)
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So -- where did the money for consumer spending come from? Part of it came from savings. Here is a chart from the St. Louis Federal Reserve of U.S. national savings. Notice this number has been decreasing for the last 25 years and is currently hovering around 0%.

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Debt is the real source of funds for this expansion (this information comes from the Federal Reserve's Flow of Funds report and the Bureau of Economic Analysis).

[Figure: Household debt jumped from 70% to 97% of GDP since 2000 ... double level of 1980]

[Figure: Household debt jumped from 95% of income to 133% since 2000 ... doubled since 1980]

As a result of this increased debt load, a larger portion of consumer's income (which has been stagnant for this expansion) is going to debt payments:

So looking at the consumer we see the following picture emerge.

1.) Job growth was the weakest of any post WWII recovery.

2.) Real median income actually dropped for the duration of this expansion.

3.) To sustain consumption, consumers went on a mammoth debt acquisition binge, so that now

4.) Debt payments are as high as they have ever been on a percentage of disposable income basis.

So after 7 years of economic expansion we have lower incomes and more debt.

However, the consumer isn't the only person who ran up a ton of debt.

The Bush White House has again run up the national credit card. Here is a list of total debt outstanding at the end of the government's fiscal year:

09/30/2007 $9,007,653,372,262.48
09/30/2006 $8,506,973,899,215.23
09/30/2005 $7,932,709,661,723.50
09/30/2004 $7,379,052,696,330.32
09/30/2003 $6,783,231,062,743.62
09/30/2002 $6,228,235,965,597.16
09/30/2001 $5,807,463,412,200.06
09/30/2000 $5,674,178,209,886.86

The current debt outstanding is $9,437,425,175,221.31

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So let's sum up.

1.) The weakest job growth since WWII led to a declining median family income.

2.) In order to keep spending the U.S. consumer continued to save less and borrow more.

3.) At the national level, the U.S. government has issued over $500 billion dollars of net new debt per year since 2002. This has led to an increased reliance on foreign investors to finance our way of life.

4.) The trade deficit has continued to expand, although oil is responsible for a fair amount of that increase.

5.) In short, the U.S. continues to consume more than it produces.

At some point, we will have to pay the bill.

This is the end result of the "Bush boom" or "the greatest story never told."

Bush administration is proposing a sweeping overhaul of the way the nation's financial industry is regulated

Bush Seeks Financial Regulation Overhaul | By MARTIN CRUTSINGER, AP Economics Writer | 3/29/2008 1:08 AM

WASHINGTON - The Bush administration is proposing a sweeping overhaul of the way the nation's financial industry is regulated.

In an effort to deal with the problems highlighted by the current severe credit crisis, the new plan would give major new powers to the Federal Reserve, according to a 22-page executive summary obtained Friday by The Associated Press.

The proposal would designate the Fed as the primary regulator of market stability, greatly expanding the central bank's ability to examine not just commercial banks but all segments of the financial services industry. ...

"formidable complexity of measuring the scale of potential exposure" to derivatives made it hard to monitor and to gauge financial vulnerability ...

Searching for the cause of the crisis on Wall Street | By Nelson D. Schwartz and Julie Creswell | Published: March 24, 2008
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Even though Gross, 63, is a market veteran who has lived through the collapse of other banks and brokerage firms, the 1987 stock market crash and the near meltdown of the Long-Term Capital Management hedge fund a decade ago, he said the current crisis feels different - in both size and significance.

The U.S. Federal Reserve has not only taken action unprecedented since the Great Depression - by lending money directly to major investment banks - it also has put taxpayers on the hook for billions of dollars in questionable trades that these same bankers made when the good times were rolling.

"Bear Stearns has made it obvious that things have gone too far," said Gross, who planned to use some of his cash to bargain-shop. "The investment community has morphed into something beyond banks and something beyond regulation. We call it the shadow banking system."
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On Wall Street, of course, what you do not see can hurt you. In the past decade, there has been an explosion in complex derivative instruments, like collateralized debt obligations and credit default swaps, that were intended primarily to transfer risk.

These products are virtually hidden from investors, analysts and regulators, even though they have emerged as being among Wall Street's most outsized profit engines. They do not trade openly on public exchanges, and financial services firms disclose few details about them.
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"Not only did Wall Street have so much freedom, but it gave commercial banks an incentive to try and evade their regulations," Frank said. When it came to Wall Street, he said, "we thought we didn't need regulation."
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"In reality," Greenberger added, "it spread a virus through the economy because these products are so opaque and hard to value." A representative for Greenspan said he was preparing to travel and could not comment.

A milestone in the deregulation effort came in the autumn of 2000, when a lame-duck session of Congress passed a little-noticed piece of legislation called the Commodity Futures Modernization Act. The bill effectively kept much of the market for derivatives and other exotic instruments off-limits to agencies that regulate more conventional assets like stocks, bonds and futures contracts.
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Regardless, with profit margins shrinking in traditional businesses like underwriting and trading, Wall Street companies rushed into the new frontier of lucrative financial products like derivatives.
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Timothy Geithner, a career civil servant who took over as president of the New York Fed in 2003, was trying to solve a variety of global crises while at the Treasury Department. As a Fed president, he tried to get a handle on hedge fund activities and the use of leverage on Wall Street, and he zeroed in on the credit derivatives market.

Geithner brought together leaders of Wall Street companies in a series of meetings in 2005 and 2006 to discuss credit derivatives, and he pushed many of them to clear and settle derivatives trading electronically, hoping to eliminate a large paper backlog that had clogged the system.

Even so, Geithner had one hand tied behind his back. While the Fed regulated large commercial banks like Citigroup and JPMorgan, it had no oversight on activities of the investment banks, hedge funds and other participants in the burgeoning derivatives market. And the industry and sympathetic politicians in Washington fought attempts to regulate the products, arguing that it would force the lucrative business overseas.

Geithner declined an interview request for this article.

In a May 2006 speech about credit derivatives, Geithner praised the benefits of the products: improved risk management and distribution, as well as enhanced market efficiency and resiliency. As he had on earlier occasions, he also warned that the "formidable complexity of measuring the scale of potential exposure" to derivatives made it hard to monitor the products and to gauge the financial vulnerability of individual banks, brokerage firms and other institutions.

When increased defaults in subprime mortgages began crushing mortgage-linked securities last summer, several credit markets and many companies that play substantial roles in those markets were sideswiped because of a rapid loss of faith in the value of the products.

Two large Bear Stearns hedge funds collapsed because of bad subprime mortgage bets. The losses were amplified by a hefty dollop of borrowed money that was used to try to juice returns in one of the funds.

All around Wall Street, dealers were having trouble moving exotic securities linked to subprime mortgages, particularly CDOs, which were backed by pools of bonds. Within days, the once-booming and actively traded CDO market - which in three short years had seen issues triple in size, to $486 billion - ground to a halt. ...

Barack Obama accused Republicans of trying to solve “all problems under the sun” by cutting taxes ...

April 4, 2008, 8:37 PM | Obama Criticizes GOP's "Tired Philosophy" of Tax Cuts as Problem Solver | Posted by Maria Gavrilovic

GRAND FORKS, N.D. -- Barack Obama accused Republicans of trying to solve “all problems under the sun” by cutting taxes in a speech at the North Dakota State Democratic Convention tonight.

“You got a problem with health care: tax cuts. You got problem with education: tax cuts. You got a problem with the economy: tax cuts. Poverty: tax cuts. That’s not a policy, it’s a dogma, a tired and cynical philosophy,” Obama told a crowd of over 17,000. ...

"instead of establishing a 21st century regulatory framework, we simply dismantled the old one-aided by a legal but corrupt bargain "

March 29, 2008 by MotherJones | It’s The Deregulation, Stupid | by James Ridgeway

... Obama depicted the current economic crisis as a consequences of deregulation in the financial sector. “Our free market was never meant to be a free license to take whatever you can get, however you can get it,” he said. “Unfortunately, instead of establishing a 21st century regulatory framework, we simply dismantled the old one-aided by a legal but corrupt bargain in which campaign money all too often shaped policy and watered down oversight.”
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Deregulation has been the mantra on both sides of the aisle since the late 1960s. Long gone are Democrats like Michigan’s Phil Hart who, as chair of the Senate Antitrust Subcommittee, held hearings on the concentration of economic power in the United States, and proposed expanded government regulation of everything from the oil and auto industries to pharmaceuticals to professional sports. Hart believed that because wealth and power were concentrated in the hands of such a small number of corporations, the market economy had become no more than a facade. In this context, what would bring about lower prices and greater productivity and innovation was more government intervention and regulation, not less.
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Even more damaging, in light of today’s economic crisis, was the sweeping deregulation of the banking and financial services industries that took place in the 1990s. What makes this enterprise particularly confounding is not only the fact that it took place under a Democratic president with support from a majority of Democrats in Congress, but that it followed so closely on the heels of the savings and loan crisis, which ought to have served as a cautionary tale on the dangers of deregulation in the banking sector. The Depository Institutions Act of 1982, another Reagan initiative, was supposed to “revitalize” the housing industry by freeing up the S&Ls to make more loans. Instead, the regulation rollback led to what economist John Kenneth Galbraith called “the largest and costliest venture in public misfeasance, malfeasance and larceny of all time” as they engaged in a fury of high-risk lending. The collapse that followed cost taxpayers an estimated $150 billion in government bailouts, and contributed to the recession of the early 1990s.
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The Glass-Steagall Act was, in fact, a primary target of the Clinton-era deregulation effort. An early piece of New Deal-era legislation, the act was passed in response to speculation and manipulation of the markets by huge banking firms, which most liberal economists believed had brought on the crash of 1929. Glass-Steagall imposed firewalls between commercial banking and investment banking, and between the banking, brokerage, and insurance industries. According to the Center for Responsive Politics, which tracks lobbying and campaign contributions, “Eager to create financial supermarkets that peddle everything from checking accounts to auto insurance, the three industries for years have lobbied Congress to streamline regulatory hurdles that bar such operations.”

Despite Bill Clinton’s announcement that “the era of big government is over,” it took the better part of his administration for him to push these initiatives through Congress. In 1999, Treasury Secretary Robert Rubin, always a good friend to Wall Street, finally brokered a deal between the administration and Congress that allowed banking deregulation to move forward. Shortly after the compromise was reached, Rubin took a top position at Citigroup, which went on to embark upon mergers that would have been rendered illegal under Glass-Steagall. As the New York Times put it, Rubin would be leading “what has become the first true American financial conglomerate since the Depression”-a conglomerate that could exist only because of legislation he had just shepherded through Congress.
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With his speech in New York, Obama is clearly trying to show himself to be a man who isn’t afraid to bite the hand that’s feeding him. He is also putting space, on this issue, between himself and Hillary Clinton, in part by reminding voters of the outcomes of Bill Clinton’s policies. He denounced both “Republican and Democratic administrations” for regulatory failures leading to the current crisis, and, as the New York Times reported, “handouts supporting the speech” noted that “the banking and insurance industries spent more than $300 million on a successful campaign to repeal the 1933 Glass-Steagall Act in 1999.” ....

2007 imports were 14 percent of US GDP and US manufacturing comprised 12% of US GDP

March 28, 2008 | The Chop Shop Economy | Other People's Money | By ALAN FARAGO
...
Let's start with a simple explanation. The first step of the free-market acolytes within the Bush administration involves nationalization.

That is what Federal Reserve chief Ben Bernanke did, authorizing the use of derivative debt tied to mortgages as collateral for loans to banks. US Treasury Secretary Paulson has said, the unprecedented step is "temporary", an "emergency response" to avert a financial meltdown, but journalists need to measure the two hundred billion against the ocean of toxic derivatives whose owners now have reason to come calling for charity. It is on the order of trillions.

Taken as a whole, the US financial system was turned into a chop shop where stolen property is taken to be dismantled and sold off piecemeal. That Republicans, the party of fiscal conservatism and limited government, presided over the unravelling of fiscal common sense is astounding.
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Paul Craig Roberts wrote recently, "According to the latest US statistics as reported in the February 28 issue of Manufacturing and Technology News, in 2007 imports were 14 percent of US GDP and US manufacturing comprised 12% of US GDP. A country whose imports exceed its industrial production cannot close its trade deficit by exporting more."

Here is the point: even if we could export more, the sad truth is that after 20 years of globalization the manufacturing supply chain in the United States has rusted out. Except for airplanes and guns, every basic, wage-intensive industry that links raw commodities to end products has been shipped to low cost labor nations, either in whole or part.

The US economy spent the past decade balancing on one leg: housing. For a time, foreign investors in US debt were fine with arrangements that allowed them to charitably view this performance. ....

Nearly one in 10 Ohioans now receives food stamps, the highest number in the state's history ... double since 2001

1 IN 10 OHIOANS | Food stamps double since '01 | But price of food means they don't go as far now | Saturday, March 22, 2008 3:20 AM | By Catherine Candisky | THE COLUMBUS DISPATCH

Nearly one in 10 Ohioans now receives food stamps, the highest number in the state's history.

Caseloads have almost doubled just since 2001, with 1.1 million residents now collecting benefits, according to the Ohio Department of Job and Family Services.

Low wages, unemployment and the rising cost of groceries, gasoline and other necessities are to blame for financial hardships facing many Ohio families.

Caseloads have been rising steadily in the past seven years, said Brian Harter, spokesman for the state agency which oversees the food-stamp program. ...
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In central Ohio, demand at the Mid-Ohio Food Bank in January was up 14 percent over the same period a year ago, with 120,000 requests for food. ...

AT&T CEO says hard to find skilled U.S. workers ... [especially with] high school dropout rate is as high as 50 percent

AT&T CEO says hard to find skilled U.S. workers | Wed Mar 26, 9:39 PM ET

SAN ANTONIO, Texas (Reuters) - The head of the top U.S. phone company AT&T Inc (T.N) said on Wednesday it was having trouble finding enough skilled workers to fill all the 5,000 customer service jobs it promised to return to the United States from India.
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Stephenson said he is especially distressed that in some U.S. communities and among certain groups, the high school dropout rate is as high as 50 percent.

"If I had a business that half the product we turned out was defective or you couldn't put into the marketplace, I would shut that business down," he said. ...

Wall Street May Face $460 Bln in Losses

Wall Street May Face $460 Bln in Losses, Goldman Says (Update1) | By Zhao Yidi

March 25 (Bloomberg) -- Wall Street banks, brokerages and hedge funds may report $460 billion in credit losses from the collapse of the subprime mortgage market, or almost four times the amount already disclosed, according to Goldman Sachs Group Inc. Profits will continue to wane, other analysts said.

``There is light at the end of the tunnel, but it is still rather dim,'' Goldman analysts including New York-based Andrew Tilton said in a note to investors today. ...

US Home Prices Drop 11.4 Pct in January

US Home Prices Drop 11.4 Pct in January | Source: Associated Press

NEW YORK (AP) — A widely watched index of U.S. home prices fell 11.4 percent in January, its steepest drop since data for the indicator was first collected in 1987. ...

10 reasons your taxes are going up ... the war, Wall Street bailout

PAUL B. FARRELL | 10 reasons your taxes are going up | No matter who's elected president, the debt party's over | By Paul B. Farrell, MarketWatch | Last update: 7:32 p.m. EDT March 24, 2008

ARROYO GRANDE, Calif. (MarketWatch) -- Reason

No. 1: "Most Americans have yet to feel any of the costs of the Iraq war," write Nobel economist Joseph Stiglitz and Linda Bilmes in an excerpt of their new book, "The Three Trillion Dollar War," in Vanity Fair. "The price in blood has been paid by members of the volunteer military. The price in treasure has been financed entirely by borrowing. Taxes have not been raised to pay for the war."

Well, folks, the party's over. Campaign rhetoric won't hide America's excesses, denial, incompetence and arrogance much longer. No matter who's elected, taxes will increase to cover massive debts. Greed has driven America's great economic engine into a "debt contagion" ditch with a recession, bear market, price inflation, and weak job and housing markets ... you bet your taxes will increase.
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2. America's new Wall Street welfare program
This one's scary. For the first time in almost a century, the Fed's bailing out the investment bankers, those wild speculators who got us in this mess -- bailed out while two million homeowners face foreclosures and increasing interest rates.
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3. The Fed's nationalizing America's financial industry
Bear Sterns is a symptom of a systemic disease. As BusinessWeek put it: "Financiers preached the free-market gospel and pocketed unheard-of sums of money, yet when times got tough they called for a government bailout."
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4. Huge resistance to cutting social and entitlement programs
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5. America's pork barrel lobbying machine
The Washington Post says lobbying is "Washington's biggest business." All those 35,000 lobbyists will be around for the entire 2009-2012 first term of the next president, and all screaming for government handouts.
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6. White House's free market nonaction policies
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7. Aging infrastructure: roads, bridges, water, sewer, etc.
Imagine taking that $50 billion monthly cost of fighting and rebuilding Iraq and shifting it to upgrading our own highways, hospitals, power, sewer and water plants. Dream on. ...
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8. Paradigm shift: consumer spending vs. consumer savings
In one generation our savings rate declined below zero ...
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9. Recession reality replacing arrogant optimism
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10. Now your turn, what's your top reason taxes will increase? ...

In February, manufacturing lost 52,000 jobs, and over the last 91 months manufacturing has shed more than 3.6 million jobs ...

Apri1 3, 2008 | Bush Administration Dithers While Rome Burns | The Deepening Recession | By PETER MORICI

... The rapid decline in the market value of mortgage-back bonds issued by these banks, and erosion in the balance sheets of the major banks caused by the declining value of unsold bonds on the books of these banks, represents a modern day run on the banks, which has required the Fed to loan the banks sums totaling about 4 percent of GDP. ...
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In February, government employment expanded by 38,000 even as overall payroll jobs contracted 63,000. This indicates the private business economy shed 101,000 jobs. ...
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In February, manufacturing lost 52,000 jobs, and over the last 91 months manufacturing has shed more than 3.6 million jobs.

The growing trade deficit with China and other Asian exporters is a key factor. If the trade deficit was cut in half, manufacturing would recoup at least 2 million of those jobs, U.S. growth would exceed 3.5 per cent a year, ...