How Long Should Unemployment Benefits Last?
March 11, 2010
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By Angie Moreschi:
Does extending unemployment benefits just end up extending unemployment? It’s a question a lot of people are asking as the Senate passed yet another extension of jobless benefits. The provision to extend unemployment benefits is part of a $138 billion package which also extends dozens of expiring tax benefits, eases corporate pension requirements, and heads-off a cut in Medicare reimbursements to doctors. The bill passed in a 62-36 vote.
The unemployment provision in the new bill extends benefits up to 99 weeks, which is almost 2 years. Benefits have generally been limited to 26 weeks or 6 months, but several extensions already enacted have elongated the benefit time period to 78 weeks, which is 18 months. And now, this will extend it again to 99 weeks.
The extensions come in the face of extraordinarily trying economic times which have made finding a job difficult. The jobless rate held steady at 9.7% in February, with 14.9 million Americans reportedly out of work. Those individuals have been unemployed for an average of 29.7 weeks.
Critics say the unemployment benefits program which was created as a temporary bridge for laid off workers is turning into a very expensive entitlement. About 11.4 million out-of-work people now collect unemployment compensation, at a cost of $10 billion a month. Unemployment compensation is funded largely through employer taxes, but occasional extensions by Congress are made on a federally funded basis.
Helping Hand or New Form of Welfare?
At what point does a helping hand turn into a hand-out that people abuse? An increasing number of opponents suggest extending jobless benefits discourages people from trying to find a job.
Sen. Jon Kyl (R-Ariz.) told the Senate he questioned why anyone would see unemployment benefits as helpful to the economy, or to the job market. “If anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work,” Kyl said. “I am sure most of them would like work and probably have tried to seek it, but you can’t argue it is a job enhancer.”
A labor economist at the Heritage Foundation told the Washington Post that with all the extensions unemployment benefits are turning into a form of welfare. “It is appropriate and natural for Congress to extend the time limit of unemployment insurance with the job market as bad as it is, but by quadrupling it, it is no longer an unemployment insurance program but a welfare program,” said James Sherk.
Necessary in Difficult Times
Others say the extensions are necessary in these difficult economic times. The National Employment Law Project urged Congress to pass the latest extension without to prevent thousands of people from losing their unemployment benefits.
“Congress must swiftly act to maintain the lifeline for millions of jobless Americans caught in the undertow of record long-term unemployment in this ongoing downturn,” said NELP director Christine Owens in a statement.
Is 99 Weeks Too Much?
The centerpiece of the measure passed by the Senate would extend provisions offering the jobless as many as 99 weeks of unemployment assistance averaging $300 per week along with a 65 percent subsidy to help buy health insurance through the federal Cobra program. In general, benefits are based on a percentage of an individual’s earnings over a recent 52-week period - up to a State maximum amount.
Unemployment benefits were created as part of the Social Security Act in 1935, intended to provide the unemployed some portion of their income while helping the economy weather down times. In 1970, federal law was amended to allow for extensions within the unemployment system during periods of high and rising unemployment. Nearly two-thirds of the jobless collect unemployment benefits, which go only to those who have earned a certain amount of money in the previous year, and who lost their jobs through no fault of their own.
Do unemployment checks discourage people from finding work? What if the checks keep rolling in for nearly two years? Is it worth it? Weigh in by voting in the CWN poll above.
Ten Activities More Dangerous Than Air Travel
March 9, 2010
Just a few months into 2010, there have been 104 people killed in air crashes worldwide. The most serious was the January crash of an Ethiopian Airlines Boeing 737 after taking off from Beirut, Lebanon, killing all 90 aboard. Consumer Warning Network has written about air safety and ranked the various air carriers, both domestic and international.
Most people are at least a little apprehensive when boarding an airplane, but just how concerned should we all be? What’s more dangerous than getting on an airplane?
According to the National Safety Council’s data on accidents, the lifetime odds of dying from an injury are 1 in 24. There are many ways of suffering from accidental injury, from being bitten by a venomous spider (1 in 716,000) to suffocating in bed (1 in 11,000). Herewith is a list of ten activities, in increasing order of danger, that present a greater threat of death than traveling by air, based on lifetime odds:
- Drowning in natural water (1.5 times more dangerous than air travel);
- Falling down a flight of stairs (1.7 times more dangerous);
- Being poisoned (3.3 times more dangerous);
- Killed on a motorcycle (3.5 times more dangerous);
- Dying in a building fire (3.7 times more dangerous);
- Suffocating on an injested non-food object (4 times more dangerous);
- Dying in a pickup truck or van crash (4.2 times more dangerous);
- Being killed while crossing a street (7.5 times more dangerous);
- Overdosing on narcotics (8 times more dangerous); and, no surprise;
- Dying in a car crash (19 times more dangerous than traveling by air).
We’ve all heard that the car trip to the airport is more dangerous than the plane trip, but how many realize it is almost 20 times more dangerous, or that crossing the street to the air terminal is almost 8 times more dangerous?
World’s Most Admired Companies
March 5, 2010
By Angie Moreschi:
Fortune Magazine is back at it with another list to capture the collective mindset on which companies are the most admired. “Most admired” falls closely in line with being profitable, as you might imagine, but not always. Other key factors in getting the nod included respect for the product, service quality and innovation.
Apple, with its legion of devoted followers, not surprisingly, ranked number one. It was followed in second place by Google, which I personally could not live without. Ironically, Toyota, in the midst of its brand meltdown due to safety concerns over sudden acceleration in its vehicles, made the top 10, coming in at number seven. Also in the top ten, Berkshire Hathaway, Johnson & Johnson, Amazon.com, Proctor & Gamble, Goldman Sachs, Wal-Mart, and Coca-Cola.
To come up with the list, Fortune’s survey asked businesspeople to vote for the companies they admired most, from any industry. Here’s a look at the list. Click on each company to get a description of that company’s business status.
Top 50 most admired companies overall:
| Rank | Company |
|---|---|
| 1 | Apple |
| 2 | |
| 3 | Berkshire Hathaway |
| 4 | Johnson & Johnson |
| 5 | Amazon.com |
| 6 | Procter & Gamble |
| 7 | Toyota Motor |
| 8 | Goldman Sachs Group |
| 9 | Wal-Mart Stores |
| 10 | Coca-Cola |
| 11 | Microsoft |
| 12 | Southwest Airlines |
| 13 | FedEx |
| 14 | McDonald’s |
| 15 | IBM |
| 16 | General Electric |
| 17 | 3M |
| 18 | J.P. Morgan Chase |
| 19 | Walt Disney |
| 20 | Cisco Systems |
| 21 | Costco Wholesale |
| 22* | BMW |
| 22* | Target |
| 24 | Nike |
| 25 | PepsiCo |
| 26 | Starbucks |
| 27 | Singapore Airlines |
| 28 | Exxon Mobil |
| 29 | American Express |
| 30 | Nordstrom |
| 31 | Intel |
| 32 | Hewlett-Packard |
| 33 | UPS |
| 34 | Nestlé |
| 35 | Caterpillar |
| 36 | Honda Motor |
| 37 | Best Buy |
| 38 | Sony |
| 39 | Wells Fargo |
| 40 | eBay |
| 41 | Nokia |
| 42 | Samsung Electronics |
| 43 | Deere |
| 44 | L’Oréal |
| 45 | AT&T |
| 46 | Lowe’s |
| 47 | General Mills |
| 48 | Marriott International |
| 49 | DuPont |
| 50 | Volkswagen |
Waste in the Health Care System - Outrageous Prices
March 1, 2010
If you’re looking to buy a toothbrush, stay far far away from a hospital. Imagine paying $1000 for ONE toothbrush. Perhaps we should call it an oral contaminant removal system, given the hefty price tag, but whatever you call it, it’s simply outrageous. And more importantly, it’s why American health care costs are skyrocketing. Click here for more.
Get Giant Lenders Off Corporate Welfare
February 27, 2010
By Nicole Mayer:
Eliminate the middle man and you pay less. Everyone knows that. So, once and for all, it’s time to save the taxypayers some money by removing private lenders from the process of writing government backed student loans. It’s a concept the Obama administration has embraced and is pushing to make a reality. Consumers would be much better off if they would just hurry up.
Time to Get it Done
It was one year ago that President Obama first unveiled a proposal to have the government take control of the federal student loan industry. The plan was to eliminate the Federal Family Education Loan Program (FFELP), in which private lenders service federal loans and rake in big bucks doing so. A June 2009 analysis conducted by the Congressional Budget Office showed this switch could result in a savings of $87 billion in taxpayers money over the next ten years.
A Washington Post article in May 2009 noted, “for the past two decades, every attempt to overhaul the $85-billion-a-year student loan industry by eliminating subsidies to lenders has faced insurmountable opposition from one of the most powerful institutions in the business: Sallie Mae, the world’s largest student loan company.”
However, when President Obama unveiled his plan in 2009, Sallie Mae curiously didn’t come out full force against it. In fact, Sallie Mae’s February 26, 2009, press release stated “We commend President Obama’s call to invest savings from low-cost federal funding sources to help students achieve their education goals.” Sallie Mae was “committed to delivering and servicing federal student loans regardless of the funding source.”
Get Giant Lenders Off Corporate Welfare
The plan seemed like a no-brainer. Get giant lenders like Sallie Mae off corporate welfare and give money to students who need it. The House of Representatives gave its approval by passing the Student Aid and Fiscal Responsibility Act of 2009 on September 17, 2009, with a vote of 253-171.
But the tides have changed. Today, the student lending bill is stuck in the Senate. It is now vulnerable to revision, weakening and delay. Even if it survives revision, there are doubts over whether the Senate will pass the bill any time soon. Democratic support for the bill is weaning along with the many Republicans who have already expressed opposition. So, what happened?
What Happened?
Let’s look at the timing of this. In February 2009, Sallie Mae, the source of the heaviest student loan lobbying of all time, was engaged in a bidding war over a government contract worth hundreds of millions of dollars. The company was at risk of losing its lifeline– the servicing of federal student loans and the fees and subsidies that come along with that job. Is not hard to see why Sallie Mae would stand behind any proposal made by the government while its very existence was in jeopardy.
Fast forward one year later. Sallie Mae was awarded the highly sought-after servicing contract , and now the company’s tune has changed. Although it claims its position has not wavered, the lending giant now insists “the President’s proposal could be enhanced in a way that preserves private sector competition. . .”
Saving Money for Whom?
Then came the “research” done by the private lenders, claiming they could also save the taxpayers’ money. This statement may come as a slap in the face, making one wonder, so you could have been saving us money all along but you just didn’t bother? The Congressional Budget Office’s response to the private lenders’ proposal, known as the “Student Loan Community Proposal” was that it would take $13 billion of the estimated $87 billion of savings and put that money right into the private lenders’ pockets.
Secretary of Education Arne Duncan recently spoke out in support of student loan reform in a Wall Street Journal Op-Ed piece. In that article, Duncan recounts that “For far too long, bankers have gotten a free ride from the U.S. Department of Education.” Duncan goes on to state, “Sallie Mae, the largest player in the student lending business, has spent millions of dollars to lobby Congress and run ads in several states, claiming that our proposal will cost jobs and inhibit service. These claims must be challenged.” Secretary Duncan points out that “Sallie Mae sent thousands of American jobs overseas in 2007 to further increase profits, and it agreed to bring them back last year only to compete for our loan-servicing business.” The Consumer Warning Network was the first to cover this chain of events in an April 2009 piece.
The future of the Bill at issue is unknown. If you have an opinion, contact your Senators and share your opinion!
Banks: The New Loan Sharks
February 25, 2010
| The Daily Show With Jon Stewart | Mon - Thurs 11p / 10c | |||
| Make it Rain - Bank of America | ||||
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The Consumer Warning Network has been examining loan sharking rates charged on consumer credit cards over the past few months. Recently, The Daily Show with Jon Stewart took a humorous look at Bank of America’s hidden credit card fees and The Mob. Click here to watch!
Lawsuit Filed to Shake-Up Loan Modification Limbo
February 25, 2010
We’ve heard it all before. Federal programs, banks and lenders promising to help homeowners facing foreclosure. All too often what we see as a result is a disgrace. The lenders lead desperate homeowners down a path of hope, only to cold cock them with the reality that, “NO, we won’t give you a loan modification, after all.” Of course, the denial comes many months after the homeowner has dutifully paid thousands of dollars in reduced monthly payments during a “trial modification.” The process of trying to get a lender to work with a homeowner has turned into torture for far too many individuals who don’t want to lose their homes.
A glimmer of hope for consumers comes in the form of a couple of class action lawsuits filed by a Boston area law firm. It may finally shake things up a bit. Two lawsuits were filed this week in US District Court in Boston, which claim Wells Fargo and Bank of America have not followed federal rules for mortgage loan modifications, leaving some homeowners stuck in foreclosure “limbo.” Click here to read more about the suits in the Boston Globe.
Oysters and Food Safety - A Slimy Political Problem
February 24, 2010
By Terry Smiljanich:
“He was a bold man that first ate an oyster,” so goes the famous quote by Jonathan Swift.
Oysters have been a food treat since prehistory, but everyone knows they can also be a threat. Eating them raw can pose some risk. A big enough risk that the FDA wants to do something about it. But then came politics, rearing its ugly head.
Toyota Memo Brags of Saving $100 Million by Limiting Recall
February 22, 2010
A damaging memo has been uncovered that makes Toyota look as if the safety of its customers is just a pawn in a game of profits. The troubling document surfaces just as Toyota executives are set to head to Washington D.C. this week to face Congressional hearings.
The Detroit Free Press explainsToyota’s leading U.S. executive boasted to the automaker’s Washington staff last summer that they had saved the company more than $100 million by limiting regulatory action on sudden acceleration to a recall of equipment such as floor mats. That is according to documents turned over to a key U.S. House committee which will hold the hearings beginning Tuesday.
The Wall Street Journal reports the claim was made in a presentation for Toyota executives titled “Wins for Toyota Safety Group.” Among the “wins” the document lists are the savings claim, as well as a federal government “decision to close safety investigations of the Toyota Tacoma truck without ordering recalls, and delays to new safety rules that saved the company hundreds of millions of dollars.” The presentation, the Journal speculates, “By linking safety issues to corporate profits, could prompt difficult questions for company executives, including President Akio Toyoda, who is scheduled to testify Wednesday before the Oversight Panel.”
The carmaker’s chief executive, Akio Toyoda, is set to testify before the oversight panel on Wednesday. The House Energy and Commerce Committee opens the round of hearings on Tuesday, while a Senate committee will meet on Toyota next week.
New Credit Card Law Brings Change for Consumers
February 19, 2010
A new law that cracks down on credit card companies takes effect this week. Issuers will no longer be allowed to retroactively hike your credit card interest rate, which, in turn, makes it easier for you to get out of debt. Another result will be to make it tougher for college students to get credit cards. Click here to watch a story from KTVN in Reno on how this will affect how students do business.
Banding Together and Fighting Back!
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