Today, Congress showed what it thinks of the people on Main Street by turning down an extension of unemployment benefits for those who have lost their jobs and who have been unable to find new work.
If the legislative body is not successful in securing an approval when it will reconsider the matter on November 29, two million Americans will lose their benefits the very next day. This would be sure to result in tens of thousands of additional foreclosures, further dragging down the real estate market, and would expand the deflationary cloud hanging over the economy, not to mention the depressing Christmas season that would then have to be experienced by countless families.
A poll on Monday by Hart Research Associates revealed that nearly 75% of the registered voters surveyed said it was “too early to start cutting back benefits for workers who lost their jobs.”
Recent nationwide data reveals that there is one job available for every five applicants and, each week of the current year, more than 400,000 workers have filed first-time claims for unemployment. Further, there are indications of an imminent increase in job terminations involving municipal layoffs, including thousands of New York City workers, and new rounds of job cuts in the drug industry and even on Wall Street.
Politicians who, in general, gorge at the money-trough like starving pigs, have little motivation to help those on Main Street. After all, John Q. hasn’t thrown much largesse in their direction. But, little wonder - over the last few decades the middle class has seen its wealth deteriorated in a historic transfer that has gone directly to the rich.
Nevertheless, for some reason, most, but not all Democrats find it in their hearts to throw some degree of support to the public at large, although it would be an exaggeration to say that they are overly enthusiastic in this respect.
For example, the Republicans are much more aggressive in seeking an extension of the Bush tax cuts for the wealthy than the Democrats are in representing the interests of Main Street. The tax cut extension would add $870 billion to the currently estimated debt by 2020, including interest on the added amounts borrowed. By comparison, the slap in the face delivered to the unemployed today involved an issue that would have cost about 99% less, or $12 billion.
President Obama may have erred by signaling early on that he would be amenable to a compromise on the tax-cut issue, as this was offered without obtaining any quid pro quo agreement, such as the unemployment extension. This has seemingly energized the Republicans to not only turn down the unemployment benefits this week, but also to stiff-arm the nuclear arms treaty with Russia that the Pentagon feels is such a top security issue.
As we consider the unfortunate fact that Main Street has little representation in America’s current political system, it may be of interest to note that there is one group whose wealth has managed to weather the recession quite handily. That group is Congress, and this fact may partially explain that legislative body’s apparent disconnect with the American people.
The Center for Responsive Politics reported today, based on a study of federal financial disclosures, that the personal wealth of members of Congress increased by more than 16% between 2008 and 2009. While only 1% of Americans have assets of over $1 million, nearly half of the congressional legislators fall in that category. Fifty-five are worth $10 million or more and eight are worth $100 million or more.
And those figures don’t even begin to include the massive amounts of special-interest “donations” that are at the legislators’ disposal, subject to certain rules, or the benefits they receive from lobbying efforts.
The Center for Responsive Politics reports that there are over 12,000 lobbyists who have spent an average of $3 billion per year since 2008 on members of Congress and federal agencies. And the so-called “revolving-door system” provides many legislators with a career path out of Congress and into the even bigger money-making arena of the lobbying world.
No wonder, John Q. doesn’t stand a chance.
Dave McGill, News Correspondent
Dave’s column, "The Contrarian," generally published every Friday, to Gather Essential News and other groups will sometimes present a contrary view to various aspects of the news, or an alternate take on the conventional wisdom of the day. It will also often appear on other days of the week
Dave has been a senior officer of an eastern insurance company, involved in economic projections and investment strategy, president of a Midwestern mortgage banking company, and a financial consultant in Southern California, serving clients in the field of commercial real estate development.
You can find all of Dave’s "the contrarian" columns at: http://gather.com/thecontrarian. Keep up with Dave’s other postings and Gather activity by joining his Gather network at: http://atadaskew.gather.com.