The very jobs we're training students to do are the ones we're exporting. ... number of computer science graduates fall [smart students ?]

Reforms, not rhetoric, needed to keep jobs on U.S. soil | By Ed Frauenheim and Mike Yamamoto | May 4, 2004, 4:00AM PT
..
... the chief information officer at Trimble Navigation, a satellite software company based in Sunnyvale, Calif., that has more than 2,000 employees. "The realism is missing: Unless they're in the top 5 percent of schools, they haven't got any hope. The very jobs we're training students to do are the ones we're exporting."


...
That movement is precisely what many fear most. While manufacturing, basic programming and other types of commoditized work have already left the country, the U.S. technology industry has traditionally viewed its advanced research as the secret ingredient that keeps it at No. 1.

"R&D budgets are migrating offshore. These are red flags, because this is the heart of our business," said George Gilbert, the managing partner of the Tech Strategy Partners consultancy and a former market analyst at Credit Suisse First Boston. "It's not just labor arbitrage. Now, it's being called 'distributed development.'"
...
Forrester Research has projected that about 473,000 computer services jobs will go offshore by 2015. In addition, research firm Gartner has estimated that 1 out of 10 jobs at information technology companies will move to emerging markets and that 1 out of 20 jobs in internal information systems departments will move overseas by the end of this year.
...
The U.S. Bureau of Labor Statistics estimates that demand for software engineers will grow by nearly 50 percent between 2002 and 2012. But if the number of computer science graduates at U.S. universities continues to fall, a rising percentage of those jobs will likely go overseas.
...
The enrollment decline is most striking in California, home to Silicon Valley. Preliminary figures from San Jose State University, which counted 765 students in its computer science program in spring 2002, show a drop of about 30 percent, to 535, in the same period this year. Similar decreases have been reported throughout California State University's 19-campus system, including the one in San Francisco, which had recently considered closing its School of Engineering altogether. ...

The H-1B Prevailing Wage is Substantially Below the Median Wage of U.S. Workers ... $25,000 less in Silicon Valley

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

While several bills, such as the "SKIL Act of 2006," aim to nearly double the annual H-1B quota, all such bills provide for the legal displacement of U.S. workers by underpaid foreign workers under a flawed prevailing wage provision. The H-1B "prevailing wage" is a sham that allows employers to pay H-1B workers 25% below market wages while claiming full compliance with the law.

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.

The General Accountability Office (GAO) reports that the Department of Labor (DOL) had approved thousands of H-1B applications, in spite of clear prevailing wage violations within the applications. But GAO did not consider whether the prevailing wages themselves were flawed. Had GAO evaluated the DOL's prevailing wages against actual U.S. wages, the number of violations might have exceeded one hundred thousand.

In the Silicon Valley, California region, the median wage in 2004 for the occupation "computer programmer" was $83,500. This median represents the wages for U.S. workers with average skills and experience. But of the 9721 LCAs (Labor Condition Applications) for H-1B computer programmer in the region in fiscal year 2005, 2877 (29%) were for a salary of $57,000 or less, and fully 8193 (84%) paid less than the median wage of $83,500. ..

Voter ID laws: 25% of adult African Americans don't have government-issed phot ID ... but Supreme Court upholds requiring one ...

How Republicans Quietly Hijacked the Justice Department to Swing Elections| By Steven Rosenfeld, Ig Publishing. Posted April 15, 2008.

The GOP may have committed massive vote fraud in plain sight by encouraging widespread voter purges and restricting registration campaigns.

Jim Crow has returned to American elections, only in the twenty-first century, instead of men in white robes or a barrel-chested sheriff menacingly patrolling voting precincts, we are more likely to see a lawyer carrying a folder filled with briefing papers and proposed legislation about "voter fraud" and other measures to supposedly protect the sanctity of the vote.

Since the 2004 election, activist lawyers with ties to the Republican Party and its presidential campaigns, Republican legislators, and even the Supreme Court -- in a largely unnoticed ruling in 2006 -- have been aggressively regulating most aspects of the voting process. Collectively, these efforts are undoing the gains of the civil rights era that brought voting rights to minorities and the poor, groups that tend to support Democrats.

The Brennan Center for Justice at New York University Law School has found that 25% of adult African-Americans, 15% of adults earning below $35,000 annually, and 18% of seniors over sixty-five do not possess government-issued photo ID. While various studies -- such as a 2006 Election Assistance Commission report by Tova Andrea Wang and Job Serebrov, and a 2007 study by Lorraine Minnite of Barnard College -- have found modern claims of a voter fraud "crisis" to be unfounded, that has not stopped states from adopting remedies that impose burdens across their electorate and on voter registration organizations. "Across the country, voter identification laws have become a partisan mess," Loyola University Law Professor Richard Hasen said in an Oct. 24, 2006 Slate.com column, speaking of one such remedy. "Republican-dominated legislatures have been enacting voter identification laws in the name of preventing fraud, and Democrats have opposed such laws in the name of protecting potentially disenfranchised voters." Hasen was commenting on a little-noticed 2006 Supreme Court ruling, Purcell v. Gonzales, which upheld Arizona's new voter ID law. The court unanimously affirmed the state's 2004 law, writing that, "Voter fraud drives honest citizens out of the democratic process and breeds distrust of our government. Voters who fear their legitimate votes will be outweighed by fraudulent ones will feel disenfranchised."

Hasen said that while the ruling "seem[ed] reasonable enough" at first glance, it actually was deeply troubling, as the Court never investigated if there was evidence of widespread voter fraud, and never examined "how onerous are such [voter ID] laws." Instead, it adopted the Republican rhetoric on the issue "without any proof whatsoever." Hasen then quoted Harvard University History Professor Alexander Keyssar on the Court's rationale. "FEEL disenfranchised? Is that the same as 'being disenfranchised?' So if I might 'feel' disenfranchised, I have a right to make it harder for you to vote? What on Earth is going on here?" ...

H-1b program is dissuading next generation of Americans from entering the tech profession ...paying H1-Bs 25% below what they would have to pay Ameri

Programmers Guild rebuts Bill Gates call for more H-1b visasMarch 12, 2008

1) One way to “allow more highly-skilled workers to remain in the U.S.” is to grant H-1b visas on the basis of skill rather than by a lottery. But just as last year the Programmers Guild expects USCIS to conduct a lottery, granting H-1b to $16/hour hotel clerks while denying visas to PhD genetic researchers. The best proxy for “skill” is “wage.” This simple reform in H-1b would allow Microsoft to have as many “highly skilled H-1b” as then need under the current cap – AS LONG AS THEY PAID THEM WHAT THEY ARE WORTH.

2) Our competitive advantage is eroding, and Bill Gates has used the H-1b program to facilitate that erosion. Microsoft used the H-1B visa to train a critical mass of foreign workers within the U.S., then used these workers to establish overseas operations, with U.S. technology in their back pockets. East Side Journal explained on October 10, 2002:

``The replication of Microsoft's culture [ at [Hyderabad's] Hi-Tec City ] has been possible because many people who worked in Redmond for many years have moved back to be part of the India Development Center,'' Koppolu wrote.

Between October 1999 and February 2000, [Microsoft] obtained 362 H-1B visas from the Immigration and Naturalization Service, making it the U.S.'s sixth-largest importer of Indian employees for that period.
...
3) We agree with Gates that U.S. “workforce development” needs to be improved. Gates claims that Microsoft needs more H-1b to hire new foreign graduates. But there are many U.S. graduates with several years of experience trying to find work at Microsoft and other employers – but Gates does not open these “entry level” positions to these Americans. Why? Experienced Americans are only considered for the positions that require an arbitrary 3 to 7 years of experience in several specific skills – then the Americans are summarily rejected for not meeting all of those arbitrary qualifications.

Nearly all Microsoft jobs require 3-5 years experience in several technologies. In effect the “richest man in the world” is too cheap to hire and train his American workforce. ...
...
Eight of the top 10 users of H-1b are foreign consulting firms. These Indian firms bring in thousands H-1b workers each, admit to paying them 25% below what they would have to pay Americans, thus displacing U.S. consulting firms and U.S. consultants. This is not helping “Americas global competitiveness.” H-1b needs to be reformed so that employers must pay at least a median wage to H-1b workers.

The H-1b program is dissuading the next generation of Americans from entering the tech profession. H-1b forces new graduates, with $50k student loans and no experience, to directly compete for American jobs against citizens from every country in the world. There is currently no requirement that employers give preference to American applicants. The Programmers Guild thinks that there should be. ....

Most foreign workers work at or near entry level, described by the Department of Labor in terms akin to apprenticeship.

H-1Bs: Still Not the Best and the BrightestCenter for Immigration Studies ^ | April 28, 2008 | Dr. Norman Matloff | Posted on Monday, April 28, 2008 11:38:13 AM by AuntB

In pressuring Congress to expand the H-1B work visa and employment-based green card programs, industry lobbyists have recently adopted a new tack. Seeing that their past cries of a tech labor shortage are contradicted by stagnant or declining wages, their new buzzword is innovation. Building on their perennial assertion that the foreign workers are “the best and the brightest,” they now say that continued U.S. leadership in science, technology, engineering, and mathematics (STEM) hinges on our ability to import the world’s best engineers and scientists. Yet, this Backgrounder will present new data analysis showing that the vast majority of the foreign workers — including those at most major tech firms — are people of just ordinary talent, doing ordinary work. They are not the innovators the industry lobbyists portray them to be.

I presented some initial analyses along these lines in an earlier Backgrounder,1 showing for instance that STEM foreign students at U.S. universities tend to be at the less-selective universities. Here I present a much more direct analysis, making use of a simple but powerful idea: If the foreign workers are indeed outstanding talents, they would be paid accordingly. ...
...
This article also presents further data showing an equally important point:

* Most foreign workers work at or near entry level, described by the Department of Labor in terms akin to apprenticeship. This counters the industry’s claim that they hire the workers as key innovators, and again we will see a stark difference between the Asians and Europeans.
...
East vs. West The lobbyists love to claim that the industry resorts to hiring foreign workers because Americans are weak in math and science. Various international comparisons of math/science test scores at the K-12 level are offered as “evidence.” The claims are specious — after all, both major sources of foreign tech workers, India and China, refuse to participate in those tests, and India continues to be plagued with a high illiteracy rate. Serious educational research, including an earlier Arizona State university report4 and a recent major study by the Urban Institute5 show clearly that mainstream American kids are doing fine in STEM.

Nevertheless, the “Asian mystique” persists. The image is that our tech industry owes its success to armies of mathematical geniuses arriving to U.S. graduate schools from Asia. Once again, though, the data do not support this perception. Here is a comparison of TM values for foreign workers from the major Asian countries and their counterparts in Europe and Canada:

The differences here are not large, but nevertheless, all of the Western nations have higher median TM values than all the Asian nations — quite the opposite of the portrayal by the industry lobbyists. ...
...
The facts show otherwise. Most foreign tech workers, particularly those from Asia, are in fact not “the best and the brightest.” This is true both overall and in the key tech occupations, and most importantly, in the firms most stridently demanding that Congress admit more foreign workers. Expansion of the guest worker programs — both H-1B visas and green cards — is unwarranted.

only people who don't believe speculation is driving a commodities bubble are the big commodity traders and the commodities exchanges

Now, a Commodities Conundrum | By Steven Pearlstein | Wednesday, April 30, 2008; Page D01

The global financial system these days is beginning to look like a giant Whac-a-Mole game -- when we think we've knocked down one speculative bubble, another one just like it pops up.

The latest is the commodities bubble -- everything from oil and natural gas to gold, copper, wheat and rice. As with the credit bubble before it, the explosion in commodities prices has its origins in a global savings glut and massive trade imbalances. Like the credit bubble, this speculative bubble in commodities has badly distorted the workings of key markets and sectors of the global economy. And as with the other, this bubble is creating vast new wealth for some, including brokers, traders and investment houses who have gorged on fees and trading profits.

The difference this time, however, is that even before it bursts, this bubble is causing economic discomfort for households and businesses around the world, and misery for hundreds of millions of hungry people who suddenly cannot afford a bowl of rice or scrap of meat. The Post's eye-opening series this week on the global food crisis has provided a grim reminder that the global economic ecosystem has become so interdependent that a drought in Australia, a tax credit in the United States, French farm subsidies and export controls in India can wind up forcing a desperate African farmer to eat his seed corn.

Although commodity prices are notoriously volatile, the price increases in the past year are off the chart: rice up 122 percent; wheat, 95 percent; soybeans, 83 percent; crude oil, 82 percent; corn, 66 percent; gold, 37 percent.
...
On many commodities markets these days, the cash or spot market are often below that of futures market -- a condition known as "contango" that usually signals that something other than market fundamentals are at play.

Perhaps the best proof of all that there's a speculative bubble in commodities that may be about to burst: ConAgra, the 147 year-old food professor, last month sold its commodity trading division to a hedge fund for $2.1 billion. Cash.

Indeed, the only people who don't believe speculation is driving a commodities bubble are the big commodity traders and the commodities exchanges, which are profiting handsomely from the soaring prices and trading volumes, and the regulators at the Commodities Futures Trading Commission, whose economists cannot seem to find statistical evidence that financial investors have had much of an impact on commodity prices. ...

Finance capitalism has "devoured landlord and industrialist alike" and created a galaxy of seductive liabilities which masquerade as assets

Mike Whitney: Want to Save the Economy? Apri1 12 / 13, 2008 | Spread the Wealth and Give Workers a Raise
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The US subprime fiasco has spiraled into what the IMF is calling "the largest financial shock since the Great Depression." America's capital markets are on the fritz. The corporate bond market is frozen, the banks are buckling from their losses, and the housing market is in a shambles. No one is buying and no one is lending. Private equity deals are off 75 per cent from last year and no one will touch a mortgage-backed security (MBS) with a ten foot pole. The mighty wheel of modern finance is grinding to a standstill and no one's quite sure how to rev it up again.
...
That's why so many people bought homes when they should have opened savings accounts. They were duped into speculating on housing so they could get a chunk of money. It looked like a good way to overcome stagnant wages and crappy hours. The cheer-leading TV pundits offered assurances that "housing prices never go down". It was all baloney. Now 15 million homeowners are upside-down on their mortgages and the very same experts are scolding workers for fudging the facts on their income disclosure forms. It's all backwards.
...
Michael Hudson: "The problem with parasites is not merely that they siphon off the food and nourishment of their host, crippling its reproductive power, but that they take over the host's brain as well. The parasite tricks the host into thinking that it is feeding itself.

"Something like this is happening today as the financial sector is devouring the industrial sector. Finance capital pretends that its growth is that of industrial capital formation. That is why the financial bubble is called 'wealth creation,' as if it were what progressive economic reformers envisioned a century ago. They condemned rent and monopoly profit, but never dreamed that the financiers would end up devouring landlord and industrialist alike. Emperors of Finance have trumped Barons of Property and Captains of Industry." (Michael Hudson, "The Coming Financial Reality", counterpunch, interviewed by Standard Schaefer.)

Bingo. Hudson not only explains how finance capitalism is inserting itself into the governmental power structure but, also predicts that "industrial capital formation" -- which is the production of things that people can really use to improve their lives -- will be replaced with complex debt-instruments and derivatives that add no tangible value to people's lives and merely serve to expand the wealth of an entrenched and increasingly powerful investor class.

Finance capitalism has "devoured landlord and industrialist alike" and created a galaxy of seductive liabilities which masquerade as assets. Derivatives contracts, for example, represent over $500 trillion of unregulated counterparty transactions; a "shadow banking system" completely disconnected from the underlying "real" economy, but large enough to send the world into a agonizing depression for years to come.
...
Henry Liu expands on this idea in his excellent article "A Panic-stricken Federal Reserve":

"In the 1920s, the wide disparity of wealth between the rich and the average wage earner increased the vulnerability of the economy. For an economy to function with stability on a macro scale, total demand needs to equal total supply. Disparity of income eventually will result in demand deficiency, causing over-supply. The extension of credit to consumers can extend the supply/demand imbalance but if credit is extended beyond the ability of income to sustain, a debt bubble will result that will inevitably burst with economic pain that can only be relieved by inflation.....More investment normally increases productivity. However, if the rewards of the increased productivity are not distributed fairly to workers, production will soon outpace demand. The search for high returns in a low demand market will lead to consumer debt bubbles with wide-spread speculation .... Today, outstanding consumer credit besides home mortgages adds up to about $14 trillion, about the same as the annual GDP. "

Voila. A strong economy requires a strong workforce and an equitable distribution of wealth. When money is concentrated in too few hands, the political system atrophies and becomes unresponsive to the needs of its people. That's when the nation's laws and institutions are reshaped to reflect the ambitions of rich and powerful.
...
The only way to break the stranglehold of Wall Street's financial Politburo is to level the playing field through greater wealth distribution. That's the best way to rekindle democracy and make America the land of opportunity again. And it all starts with giving America's workers a raise. ...

Sen Voinovich, an Ohio Republican: "We've kind of bankrupted this country" with the war spending.

Biden treads lightly at Iraq hearing - 2008 Presidential Campaign Blog - Political Intelligence - Boston.comApril 8, 2008
...
Senator George Voinovich, an Ohio Republican, broke with the party line, declaring, "We've kind of bankrupted this country" with the war spending. "We're in a recession," he added, "and God knows how long it's going to last." ...

Programmers Guild: U.S. Rep. Gabrielle Giffords targets U.S. tech workers for displacement

Programmers Guild: U.S. Rep. Gabrielle Giffords targets U.S. tech workers for displacementSunday, March 23, 2008

It is well documented that qualified U.S. workers are being displaced by H-1b workers, even at the current cap of 65,000. See the testimonials at HireAmericansFirst.org, for example.

What is Gifford's solution? To double the cap to 130,000. I left a message for staff C.J. Karamargin 520-881-3588 (or 202-225-2542) on March 20th but C.J. did not return my call.

According to the March 19th InfoWorld article "Bill would double cap on H-1B visas," she introduced the bill just one day after Bill Gates had testified before Congress - and no representatives of U.S. workers were invited to rebut Gates: ...

COMMENTS
According to Arizona Central CareerBuilder job search, there are 832 IT positions advertised. But there are also 1840 sales and marketing ads, and 2680 healthcare ads. So how did Rep. Giffords determine that IT workers rather than healthcare, sales, and marketing workers are what are needed to keep Arizona's economy strong?

The InfoWorld article states, "The bill would prohibit companies from hiring H-1B workers, then outsourcing them to other companies, he said. H-1B opponents have complained that outsourcing companies are among the top users of H-1B visas." Can you please show us in the bill where the top users of H-1b "InfoSys, TCS, Wipro..." would be limited in their use of H-1b? We can't find any such language. ...

Past and current military spending consumes more than 40 cents of every federal income tax dollar.

59.pdf (application/pdf Object)
...
The median income family in Illinois paid $3,336 in federal income taxes in 2007. Here is how that money was spent:
Military $1,407
Health $737
Interest on Non-military Debt $342
Anti-Poverty Programs $289
Education, Training & Social Services $146
Government & Law Enforcement $130
Housing & Community Development $111
Environment, Energy & Science $88
Transportation, Commerce & Agriculture $51
International Affairs $35

US Imports: 17% of GDP ... manufacturing, 11% of GDP ... behind government, .... education and health ... [massive trade deficit]

Paul Craig Roberts: The Fading American EconomyApri1 9, 2008 | Government is the Largest Employer | By PAUL CRAIG ROBERTS

According to the Bureau of Labor Statistics, the US economy lost 98,000 private sector jobs in March, half of which were in manufacturing. Today 13,643,000 Americans are employed in manufacturing, of which 9,849,000 are production workers.

Government employs 22,387,000 Americans, 8,744,000 more than manufacturing. Even the category leisure and hospitality employs 13,682,000 Americans, slightly more than manufacturing. There are as many waitresses and bartenders as production workers.

Wholesale and retail trade employ 21,467,000 Americans. Professional and business services employ 18,036,000 Americans of which 8,368,000 are in administrative and waste services. Education and health services employ 18,699,000 Americans.

Financial activities employ 8,228,000 Americans. The information sector employs 3,010,000. Transportation and warehousing employ 4,532,000. Construction employs 7,338,000, and natural resources, mining and logging employ 751,000. Other services such as repair, laundry, and membership associations employ 5,516,000 Americans.
...
Is this a portrait of a super economy?

To help answer the question, consider that US imports in 2007 were 17% of US GDP, according to the National Income and Product Account tables provided by the Bureau of Economic Affairs. In contrast, the BEA industry tables show that in 2006 (2007 data not yet available) US manufacturing comprised only 11.7% of US GDP.

If US imports actually exceed total US manufacturing output by 5% of GDP, it does not seem possible that the US can close its massive trade deficit. Even if every item manufactured in the US was exported, the US would still have a large trade deficit.
...
During the current school year, 3.3 million high school students are expected to graduate. If we assume that half will go on to college, that leaves 1.6 million entering the work force. College enrollment in 2007 totaled 18 million. If we assume 20% graduate, that makes another 3.6 million job seekers for a total of 5.2 million. Clearly, immigration, work visas, and high school and college graduates exceed the 1.5 million jobs created by the economy. Unless retirements opened up enough jobs for graduates, the unemployment rate has to rise. ...

As Jobs Vanish and Prices Rise, Food Stamp Use Nears Record

As Jobs Vanish and Prices Rise, Food Stamp Use Nears Record | By ERIK ECKHOLM | Published: March 31, 2008

Driven by a painful mix of layoffs and rising food and fuel prices, the number of Americans receiving food stamps is projected to reach 28 million in the coming year, the highest level since the aid program began in the 1960s.
...
... recent rises in many states appear to be resulting mainly from the economic slowdown, officials and experts say, as well as inflation in prices of basic goods that leave more families feeling pinched. Citing expected growth in unemployment, the Congressional Budget Office this month projected a continued increase in the monthly number of recipients in the next fiscal year, starting Oct. 1 — to 28 million, up from 27.8 million in 2008, and 26.5 million in 2007. ...

Trade Debt: service amounts to $2000 for each working American per year ... [Econmy smaller] This comes to about $10,000 per worker

Peter Morici: The Corrosive Consequences of the Trade Deficit March 17, 2008 | The Damage Worsens Each Month | By PETER MORICI
...
In the 2007, the United States had a $106.9 surplus on trade in services and a $106.9 billion surplus on income payments. This was hardly enough to offset the massive $815.9 billion deficit on trade in goods, and net unilateral transfers to foreigners equal to $104.4 billion.
...
U.S. investments abroad were $ 1,206.3 billion, while foreigners invested $1,863.7 billion in the United States. Of that latter total, only $204 billion or 11 percent was direct investment in U.S. productive assets. The remaining net capital inflows were foreign purchases of Treasury securities, corporate bonds, bank accounts, currency, and other paper assets. Essentially, Americans borrowed or sold off real estate and other assets of about $600 billion to consume about 5.3 percent more than they produced.

Foreign governments loaned Americans $412.7 billion or 3 percent of GDP. The Chinese and other governments are essentially bankrolling U.S. consumers, who in turn are mortgaging their children's income.

The cumulative effects of this borrowing are frightening. The total external debt now is about $6.5 trillion. The debt service at 5 percent interest, amounts to $2000 for each working American.
...
Lost growth is cumulative. Thanks to the record trade deficits accumulated over the last 10 years, the U.S. economy is about $1.5 trillion smaller. This comes to about $10,000 per worker.
...
Peter Morici is a professor at the University of Maryland School of Business and former Chief Economist at the U.S. International Trade Commission.

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.
...
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.
...
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. ...
...
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.
...
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.
...
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.
...
... 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.
...

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.
...
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
...
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%.

...

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

....................

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
...
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.
...
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. ...
...
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.
...
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.
...
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."
...
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. ...
...
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. ...
...
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. ...
...
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, ...

"workers and households pay for health insurance through lower wages and higher prices,"

Rising Health Costs Cut Into Wages | Higher Fees Squeeze Employers, Workers | By Michael A. Fletcher | Washington Post Staff Writer | Monday, March 24, 2008; Page A01
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The main reason: spiraling health-care costs have been whacking away at their wages. Even though workers are producing more, inflation-adjusted median family income has dipped 2.6 percent -- or nearly $1,000 annually since 2000.

Employees and employers are getting squeezed by the price of health care. The struggle to control health costs is viewed as crucial to improving wages and living standards for working Americans. Employers are paying more for health care and other benefits, leaving less money for pay increases. Benefits now devour 30.2 percent of employers' compensation costs, with the remaining money going to wages, the Labor Department reported this month. That is up from 27.4 percent in 2000.

"The way health-care costs have soared is unbelievable," said Katherine Taylor, a vice president for Local 1199 of the Service Employees International Union. "There are people out here making decisions about whether to keep their lights on or buy a prescription."

Since 2001, premiums for family health coverage have increased 78 percent, according to a 2007 report by the Kaiser Family Foundation. Premiums averaged $12,106, of which workers paid $3,281, according to the report.
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Researchers Ezekiel J. Emanuel and Victor R. Fuchs say that employer-sponsored health-care plans create the "myth" that workers are getting their health benefits for little or nothing. But, in fact, "workers and households pay for health insurance through lower wages and higher prices," they wrote in the March 5 issue of the Journal of the American Medical Association. ...

food, energy and medical care [take] a bigger chunk than since records began in 1960

Mar 24, 10:01 AM EDT | Into the economic abyss | By RACHEL BECK and ERIN McCLAM | Associated Press Writers
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Signs of the pinch are showing up everywhere:

-By the end of 2007, 36 percent of consumers' disposable income went to food, energy and medical care, a bigger chunk of income than at any time since records were first kept in 1960, according to Merrill Lynch.
...
Nearly 9 million households now have upside-down mortgages, and for the first time ever, aggregate mortgage debt is bigger than the total value of homeowner equity - bigger by $836 billion, according to research by Merrill Lynch. ...

Derivatives the new 'ticking bomb' ... Warren Buffet in 2002 !

Derivatives the new 'ticking bomb' | Buffett and Gross warn: $516 trillion bubble is a disaster waiting to happen | By Paul B. Farrell, MarketWatch | Last update: 7:31 p.m. EDT March 10, 2008

ARROYO GRANDE, Calif. (MarketWatch) -- "Charlie and I believe Berkshire should be a fortress of financial strength" wrote Warren Buffett. That was five years before the subprime-credit meltdown.

"We try to be alert to any sort of mega-catastrophe risk, and that posture may make us unduly appreciative about the burgeoning quantities of long-term derivatives contracts and the massive amount of uncollateralized receivables that are growing alongside. In our view, however, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal."

That warning was in Buffett's 2002 letter to Berkshire shareholders. He saw a future that many others chose to ignore. The Iraq war build-up was at a fever-pitch. The imagery of WMDs and a mushroom cloud fresh in his mind.
...

Derivatives bubble explodes five times bigger in five years

Wall Street didn't listen to Buffett. Derivatives grew into a massive bubble, from about $100 trillion to $516 trillion by 2007. The new derivatives bubble was fueled by five key economic and political trends:

1. Sarbanes-Oxley increased corporate disclosures and government oversight
2. Federal Reserve's cheap money policies created the subprime-housing boom
3. War budgets burdened the U.S. Treasury and future entitlements programs
4. Trade deficits with China and others destroyed the value of the U.S. dollar
5. Oil and commodity rich nations demanding equity payments rather than debt

In short, despite Buffett's clear warnings, a massive new derivatives bubble is driving the domestic and global economies, a bubble that continues growing today parallel with the subprime-credit meltdown triggering a bear-recession.

Data on the five-fold growth of derivatives to $516 trillion in five years comes from the most recent survey by the Bank of International Settlements, the world's clearinghouse for central banks in Basel, Switzerland.
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This cascading "domino effect" was brilliantly described in "The $300 Trillion Time Bomb: If Buffett can't figure out derivatives, can anybody?" published early last year in Portfolio magazine, a couple months before the subprime meltdown. Columnist Jesse Eisinger's $300 trillion figure came from an earlier study of the derivatives market as it was growing from $100 trillion to $516 trillion over five years. Eisinger concluded:
...

Recently Pimco's bond fund king Bill Gross said "What we are witnessing is essentially the breakdown of our modern-day banking system, a complex of leveraged lending so hard to understand that Federal Reserve Chairman Ben Bernanke required a face-to-face refresher course from hedge fund managers in mid-August." In short, not only Warren Buffett, but Bond King Bill Gross, our Fed Chairman Ben Bernanke, the Treasury Secretary Henry Paulson and the rest of America's leaders can't "figure out" the world's $516 trillion derivatives.

Why? Gross says we are creating a new "shadow banking system." Derivatives are now not just risk management tools. As Gross and others see it, the real problem is that derivatives are now a new way of creating money outside the normal central bank liquidity rules. How? Because they're private contracts between two companies or institutions. ...

crisis will only end when house prices stop falling: require the US government to intervene directly in the real estate market

America was conned - who will pay? | The South Sea Bubble ended in riots as trust was lost. Wall Street also duped the public | # Larry Elliott, economics editor | he Guardian, | Monday March 17 2008

... That pretence was stripped away when JP Morgan, at the behest of the Federal Reserve, stepped in when the hedge funds pulled the plug on the fifth-biggest US investment bank.

It is now clear that no end is in sight to the turmoil, and the reason for that is that the Fed and the US treasury are no closer to solving the underlying problem than they were eight months ago. The crisis will only end when house prices stop falling and banks stop racking up huge losses on their loans. Doing that, however, will require the US government to intervene directly in the real estate market to end the wave of foreclosures. Ideologically, it is ill-equipped to take that step and, as a result, property prices will fall and the financial meltdown will go on and on.

Ultimately, though, action will be taken because there will be political pressure for it. Indeed, it is somewhat surprising that there is not already rioting in the streets, given the gigantic fraud perpetrated by the financial elite at the expense of ordinary Americans.

The US has just had its weakest period of expansion since the 1950s. Consumption growth has been poor. Investment growth has been modest. Exports have been sluggish. But if you are at the top of the tree, the years since the last recession in 2001 has been a veritable golden age. Salaries for executives have rocketed and profits have soared, because the productivity gains from a growing economy have been disproportionately skewed towards capital.
...
... The method chosen was simple. Whip up a colossal housing bubble, convince consumers that it makes sense to borrow money against the rising value of their homes to supplement their meagre real wage growth and watch the profits roll in.

As they did - for a while. Now it's payback time and the mood could get very ugly. Americans, to put it bluntly, have been conned. They have been duped by a bunch of serpent-tongued hucksters who packed up the wagon and made it across the county line before a lynch mob could be formed.

...
In the longer term, lessons must be learnt from the turmoil. One is that you don't solve the problems of a collapsing bubble by blowing up another, which is what Alan Greenspan did after the dotcom fiasco in 2001 - the most irresponsible behaviour of any central banker in living memory.

The second lesson is that there has to be far stricter regulation not just of the US real estate market but of Wall Street, to prevent the return of irresponsible lending as soon as the recovery is firmly under way. If this is, heaven help us, The Big One, one of the only consolations will be that the repugnance at the orgy of speculation that has sapped the strength of the US economy will put a new New Deal on the political agenda.

But for this to happen there has to be a political response and even though this year's presidential election will be held in the shadow of recession, there appears not to be a potential FDR among the contenders for the White House. Yet if this crisis really does get as bad as some are forecasting, the public will rightly demand more than a slap on the wrist for Wall Street.