09.29.08
Posted in Financial Crisis at 1:47 am by Administrator
We are in the midst of the worst financial crisis since the Great Depression. The commercial and investment banking business was deregulated throughout the 1980s and 90s with the promise that it would lead to greater prosperity. Investors invented fancy new financial instruments to distribute and disguise the risk, and walked away with millions of dollars in profits. Consumers found it easier to get credit, and many spent well beyond their means. Some are now facing foreclosure or bankruptcy.
The biggest investment banks are failing because they have to book those losses. Even safe assets have lost billions of dollars in value. In less than two weeks we saw the five biggest bailouts in history: the world’s biggest insurer, with assets of nearly $1 trillion; two of the world’s biggest investment banks, with combined assets of $1.5 trillion; and the two giants of the mortgage industry, with assets of $1.8 trillion. The total bill so far is about $4.2 trillion- and there may be more coming.
The Federal Reserve and Treasury Department had to act because these failures threaten the stability of the global financial system. Each time another bank or financial institution is bailed out by the government, their financial obligations are absorbed by the U.S. Treasury. At the beginning of the Bush administration, total U.S. government debt was about $4.3 trillion. Two weeks ago it was about $9 trillion. After this it will be upwards of $13 trillion.
Guess who is going to end up paying that debt? Taxpayers will. In just two weeks, each American’s share of the national debt went from $30,000 to about $44,000. We owe much of it to the sovereign wealth funds of nations like China, Dubai, and Saudi Arabia, which lack democratic institutions and could change their mind about the safety of these investments any day. I’ll bet you could think of some better ways to spend your hard-earned money.
The financial innovation of investment banks had very little oversight by regulatory authorities. Most Americans didn’t receive a single dime of the profits, but they got stuck with the costs when they failed. This is corporate welfare at its very worst.
You have heard conservative politicians say that the economy is fundamentally sound and that everything will be fine. That’s nonsense. They want to offer more tax cuts for the wealthy and more deregulation as the remedy. It won’t work: that’s how we got into this mess in the first place.
Deregulation allowed commercial and investment banks to invent ever more complex financial instruments. The investors that bought and sold these products made a lot of money, but all that changed when the underlying assets (including homes) lost value. When confidence in the stability of the financial system was shaken, that deepened the crisis and caused the ensuing financial meltdown.
Many of us suffered the effects of foreclosures, bankruptcies, and deflated house prices. The long-term consequences will be higher interest rates and higher Federal income taxes. These effects will hit hardest at about the same time baby boomers are retiring in huge numbers, our children will be entering the work force, and we’ll be facing a crisis in funding for Medicare, Medicaid, and Social Security.
This may be a national problem, but there are local solutions. What state-level policies could we pursue that would mitigate the effects?
First, we need to do everything possible to keep people in their homes and restore confidence in the banking system. By focusing only on investment banks, the bailout proposed by Treasury Secretary Henry Paulson addresses only half the problem. The financial meltdown will not end until we address the other half of the problem: homeowners facing foreclosure and bankruptcy.
Now that Fannie Mae and Freddie Mac are owned by the Federal government, they need to provide low-interest fixed-rate mortgages to creditworthy homeowners facing foreclosure or an interest rate reset on adjustable rate mortgages. This will reduce borrowing costs and risks, make homeownership more affordable, reduce the inventory of unsold homes, and stabilize house prices. This in turn will stabilize the value of the mortgage-backed securities the government is taking over.
Foreclosed and vacant homes should be turned over to community land trusts and resold at a discount to families and individuals who have lost their homes. Placing the land in trust and leasing the land back to homeowners reduces the house price significantly and creates permanently affordable housing.
As for banking and the mortgage lending industry, we need to modify capital requirements- increasing them during economic booms to protect the financial system against incremental risk-taking, and lowering them during downturns to make credit more widely available when it is needed most.
Government’s role is to foster useful innovation, limit greed and speculation, and protect consumers. They failed at all three. There should be stricter standards and improved oversight of the banking industry, so that lenders act in the best interest of borrowers.
The Congressional bailout plan primarily helps Wall Street investors. Since falling house prices are the root cause of this crisis, rescuing banks will not work if we do not also rescue homeowners.
My opponent Don Benton opposed the following bills to protect consumers from mortgage scams and predatory lenders:
- Senate Bill 6381 established stricter fiduciary duties for mortgage brokers and required them to act in the best interest of borrowers.
- Senate Bill 6452 required full disclosure of interest rates and yield spread premiums.
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09.22.08
Posted in Economy and Jobs at 10:00 am by Administrator
The economy is a mess and it seems not enough is being done about it. The price of oil peaked at 3 times the price it was when President Bush took office. We have a global financial crisis that keeps getting worse, and the stock market and the dollar have lost more than half their value over that same period.
During the Clinton Administration, 22 million jobs were added to the U.S. economy. During the Bush Administration, only 5 million jobs were added. Most of them will be gone before the economy turns around again. There was a $160 billion annual federal budget surplus at the end of the Clinton Administration. There will be a $500 billion annual deficit at the end of the Bush Administration.
As a consequence of this sea of red ink, the national debt has doubled. Fully 75% of the $9 trillion national debt was created under the watch of just 3 presidents- Reagan and the two Bushes. Each person in America now owes over $30,000 of the national debt, much of it to the sovereign wealth funds of foreign countries. Foreigners are buying up U.S. assets at flea market prices.
One job after another is being outsourced, and entire industries are being relocated to countries with cheap labor. Workers here in the U.S. are pressured to accept reduced wages and benefits, and this often includes basic necessities such as sick leave and health care coverage. Average wages and salaries have barely increased over the last 8 years, while the costs of food, energy, housing, and health care have skyrocketed. Our lower standard of living has undermined the fundamental strength of the economy.
In the midst of this crisis, President Bush presented a record increase in defense spending as part of a $3 trillion budget that would reduce the growth of Medicare and Medicaid and eliminate an array of domestic programs. At a time when we need to be creating jobs and investing in infrastructure, the President called for $1 trillion in tax cuts to people making over $450,000 per year. At a time when so many families are struggling here at home, the President asked for nearly $1 trillion to continue the occupation of Iraq.
Military expenditures for the wars in Iraq and Afghanistan, combined with huge tax cuts for the wealthy, caused massive budget deficits. Not so well known is the fact that ballooning federal budget deficits also contributed to the collapse of the dollar, and that in turn led to higher import prices, especially for oil and commodities. The Iraq war has also made the supply of oil from the Middle East much less reliable, and oil companies have passed along the associated “risk premium” to consumers in the price of gas.
What’s the solution? We can start by supporting local industries that provide a sustainable alternative to foreign oil: wind and solar energy; biofuels that use locally available resources such as wood waste and farm waste; energy conservation; and recycling of everything from paper, plastics, and metal to road and construction materials. These energy alternatives will help boost local employment and wages, which will be recirculated back into the local economy and create even more jobs.
Employers should also be required to offer reasonable health care coverage to all employees, with costs shared by employer and employee. Widespread coverage would reduce premiums and medical costs and make our state more competitive in the global economy. Family wages and benefits and good working conditions attract high quality workers and businesses to our state, and provide incentives for higher education and training.
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09.14.08
Posted in Health Care at 10:20 am by Administrator
More and more working people are going without health insurance because neither they nor their employers can afford to pay for it. For employers, the rising cost of health care makes it difficult to compete in the global economy, and we risk losing jobs to countries that provide health care for their citizens.
Here are some facts about state of the health care from the Healthy Washington Coalition (www.healthywacoalition.org):
There are roughly 593,000 Washington residents without health care coverage, including 73,000 children.
Regence BlueCross BlueShield of Oregon raised rates by 26% in 2008 for individual insurance plans and 16% for small group plans, which are mostly for small businesses with 50 employees or fewer.
Health care costs for the typical household has risen six times faster than income in the last five years.
An estimated 19,000 Washington residents file for medical bankruptcy each year. Three-fourths of them had health insurance at the time they were sick or injured.
Since 1993, employer-based coverage dropped from 71% to 66% of full-time jobs in Washington.
Nearly one-third of non-elderly Washington adults goes uninsured at some point in a two year period.
Health insurance premiums for employer-sponsored coverage were $1200 higher in 2005 due to the unpaid cost of health care for the uninsured.
More than a million people in Washington state- about one in four adults under age 65- are expected to spend more than 10% of their income on health care next year, according to a national study.
Administration takes 30 cents of every dollar spent on health care.
Affordable Health Care solutions
I support the recommendations of the Washington Blue Ribbon Commission on Health Care Costs and Access and the Health Insurance Partnership, which would provide low-cost health care options to all Washington residents.
I also support these principles of the Healthy Washington Coalition:
Ensure secure, high quality and affordable health care to all Washingtonians.
Ensure choice of provider and quality affordable health plans.
Promote an affordable sliding scale for health care costs to ensure personal responsibility by all adults
Share the cost for the health system and the responsibility for making the system work between individuals, employers and government.
Care should be affordable for individuals and employers, including small businesses, and changes to the system should benefit those employers who provide quality affordable health care for employees.
Encourage personal healthful behavior by providing incentives for preventative care and health education.
Government should be a watchdog ensuring the health system is working and fair for individuals, employers, and providers; that health care remains affordable; and that there are high quality affordable health plans available.
My opponent Don Benton opposed these legislative efforts to provide affordable health care:
2008 Senate Bill 6333 establishing a citizens’ work group on health care
2007 Senate Bill 5930 providing affordable health care to Washingtonians
2006 Sub House Bill 2572 establishing small employer health insurance partnership program.
Affordable housing
I support the Housing Trust Fund and the Washington Families Fund, which are public-private partnerships that have helped many low income families find affordable housing.
Don Benton opposed 2008 House Bill 1359 creating an affordable housing program.
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09.12.08
Posted in Education at 1:42 am by Administrator
The Basic Education Act and Article IX, section 1 of the Washington State Constitution states “It is the paramount duty of the state to make ample provision for the education of all children.” State funding for basic education has not kept pace with rising costs, resulting in severe budget shortfalls. Vancouver and Evergreen school districts have also been forced to provide more programs and services mandated but not funded by both state and federal governments.
According to both school districts, local levy dollars have been redirected and reserve funds have been depleted below recommended levels in order to maintain basic programs and services. Many programs have been cut and staff positions have been eliminated.
The state of education funding is at a crisis point:
Vancouver School District has joined the Network for Excellence in Washington Schools (NEWS) lawsuit against the state for under-funding education. The lawsuit requests that basic education be fully funded as required by the State Constitution.
Vancouver School District faced a $2.4 million budget shortfall for 2007-08 and had to reduce program and staffing levels for the seventh consecutive year.
Evergreen School District is facing a budget shortfall of over $2 million next year. One-third of its students are in portable classrooms and about half receive free or reduced lunches.
Cost-of-living adjustments (COLAs) have been approved by the legislature but are not extended to all employees. Salary increases have to be redirected from other sources, including the local levy.
Vancouver School District will spend $2.7 million in levy proceeds to transport students in 2008-09. A total of $10 million in expenditures that are normally covered by state funds, such as special education and substitute teaching personnel, will have to be covered from levy funds.
Washington’s teachers are paid $3,000 less than the national average and $12,000 less than the average west coast teacher.
Washington State now ranks 45th in the nation in per student expenditures, and 46th in the nation for average class size.
Washington State’s school funding system receive a D+ rating from Education Week magazine
Basic education should be given top priority. I will work toward these legislative solutions:
Work to prioritize basic education expenditures within the state appropriations process
Build new schools and get our students out of portable classrooms
Pay our teachers competitive salaries and reduce class sizes.
Establish a strategic direction for higher education that will account for changes in demographics and workforce requirements.
Ensure that the proposed “core” curriculum requirement will not diminish resources for career and technical education, which is equally important. We may need to move to a 6-period day to accomplish this.
Every politician says they support education. Here is Don Benton’s voting record:
Supported property tax cuts that set in motion education budget shortfalls across the state
Opposed Senate Bill 6059 authorizing a direct voter initiative providing a cost of living increase for teachers
Opposed 2007 Senate Bill 5841 enhancing early childhood education
Opposed 2007 House Bill 1051 expanding high school completion programs at community colleges
Did not vote on 2006 Senate Bill expanding apprenticeship opportunities for high school graduates
Don Benton did not vote on 2002 Senate Bill 6387 Supplemental operating budget, which included:
$13.5 billion in K-12 education funding
opportunity grants to students in low-income families pursue training in high-demand fields
$60.6 million in special education funding
$12.4 in technology upgrades
$22 million to expand Early Childhood Education and Assistance Program to reach an additional 2,250 children
$25 million to provide health coverage to an additional 38,000 children
$1 million to Evergreen Schools for construction of a Health and BioSciences Academy
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09.08.08
Posted in Transportation and Infrastructure at 4:18 am by Administrator
Most of us would agree that economic growth is a good thing. Economies grow and new jobs are created through trade in goods and services with other regions. Adequate transportation and infrastructure are vital to that interaction and trade. If you were an employer with customers in Portland, would you locate here if you couldn’t get across the bridge? If you were a shipper and your drivers wasted several hours a day stuck in traffic on the I-5 bridge, would you locate a new warehouse here in Vancouver?
Like it or not, Vancouver’s economy is highly dependent on Portland. New jobs won’t happen if people and goods can’t get from here to there more easily. The current I-5 bridge is inadequate for current needs, and it will only get worse. If we want good jobs for future generations, we need to be able to move a lot more people between here and Portland than we currently do.
Since more lanes will only relieve congestion in the short term, we need to include a public transit option to increase capacity and meet future needs. To relieve traffic congestion, pay for the bridge, and make it faster and cheaper to use mass transit, we should charge a toll on the replacement bridge. A toll is not a tax. A toll is a user fee that is paid only by people who use the bridge. People who don’t wish to pay the toll should have the option of taking mass transit instead.
Time is money. Exactly how much is it worth? That’s determined by how much people are willing to pay to avoid traffic. The toll should be set at the price where congestion is eliminated, and it should vary depending on the time of day in order to maintain a free flow of traffic.
A toll bridge with high capacity mass transit is the best way to support job growth in Vancouver for future generations. We need to build it now, while we still have federal support for the project. I read the finance chapter of the EIS and am convinced that we can pay for the bridge without increasing taxes. I fully support the recommendations of the Columbia River Task Force.
I also support expansion of the Port of Vancouver, which will add between 4,000-5,000 jobs within the next 15 years. The Port currently provides about 2,300 direct jobs, $82 million in annual tax revenue, and nearly $99 million in annual payroll income to local residents.
Don Benton is opposed to replacing the I-5 bridge, and he voted against funding infrastructure development for the Vancouver waterfront
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09.02.08
Posted in Labor and Trade at 3:12 am by Administrator
Are you disturbed that our plants and jobs have moved offshore? That many of our goods are made in sweatshops without labor or environmental regulations? Or that the global economy is caught in an economic and environmental crisis at the same time huge corporations are earning record profits? In order to support workers and rebuild the local economy, we need to think about our priorities every time we shop. Living wages, comprehensive health benefits, and protection of workers’ rights attract high quality workers and businesses to our state, and provide incentives for higher education and training. What’s good for workers is good for the economy.
I support the following pro-labor policies:
Buying locally and at family or employee-owned businesses whenever possible.
Policies that protect workers’ freedom to form unions and bargain collectively, and that strengthen and enforce laws that prohibit employer intimidation and coercion.
Policies that ensure that workers have legal rights to safe, healthy and fair conditions at work.
Strengthening prevailing wage, minimum wage, and indexing laws.
Extending of unemployment benefits in times of economic hardship.
Policies to establish a ‘living wage’ designed to ensure that low-wage workers and their families can live above the poverty level.
Policies that guarantee pay equity for women who perform similar jobs and have similar skills and experience as their male counterparts.
Worker’s rights to organize and choose who shall represent them in negotiations with management.
Requiring nonunion workers to pay their fair share of services provided by a union in cases where a union is representing them and negotiating on their behalf.
Providing all residents with access to portable and affordable health care coverage.
I oppose the privatization of Social Security. This is corporate welfare to the banking and brokerage industry.
My opponent Don Benton opposed the following bills, which were supported by the Washington State Labor Council (details at www.wslc.org/legis/vr-sen08.htm):
Opposed SB 5261, granting the insurance commissioner the authority to review individual health benefit plan rates to ensure rate hikes are justified and reasonable.
Opposed SSB 6333, establishing a citizens’ work group on health care to review proposed statewide plans and propose a plan to provide comprehensive, affordable health care for all Washingtonians.
Opposed SB 6241, prohibiting the sale or use of prescriber-identifiable prescription data by Pharmaceutical Companies for commercial or marketing purposes.
Opposed SSB 6809, providing a tax exemption for low income working families, as measured by the federal earned income tax credit.
Opposed SHB 2815, requiring the state to reduce greenhouse gas emissions and establish a green jobs initiative to increase the number of green economy jobs to 25,000 by 2020.
My opponent’s campaign materials do not have the union label. Mine do.
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