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.
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 |
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.
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.
Man Illegally Rents Foreclosed Homes
February 19, 2010
Anyone renting a home may want to ask a few extra questions before signing a lease these days. One scam run out of central Florida has left several renters wondering where to go. A man took over foreclosed properties, changed the locks and rented them out to unsuspecting families. He says he did nothing wrong. Click here to check out this report by WFLA TV’s Peter Bernard, to hear the story.
The Scammers Are Phishing Again
February 15, 2010
By John Newcomer:
I got an email the other day from Wachovia Bank alerting me to some unusual activity in my account. The bank warned me that I would have limited access to my account until this issue was resolved. A helpful link was provided so that I could log onto my account and clear up the “unusual activity.” There was only one tiny problem. I don’t have an account with Wachovia.
This is what is known as a Phishing Scam. Phishing comes from the techies who replace “Ph” for the letter “F”. What the scammers are doing is “fishing” for private information, so they can get steal your credit card number or bank account. In some cases, they are looking to steal your identity.
Don’t Get Duped
The scammers are good. The email looks very official, logo and all, and the internet address is service@wachovia.com. It must be real, right? No, it is a SCAM. Legitimate banks may bombard you with offers, but they will NEVER ask for personal or banking information on the internet. If you have any doubt about the Phishing email, call the bank directly or go onto its official site and make an inquiry. NEVER click on the link in the email.
What should you do if you receive an email like this? You should forward the spam to the FTC at spam@uce.gov and report it to the bank impersonated in the phishing email. Then hit the Delete Key.
Never, ever answer the email and provide banking or personal information.
Painful Diagnosis on Why Health Insurance Reform is Dead
February 1, 2010
Too many people want everything for free. That’s a big part of the problem blocking this whole notion of health insurance reform, according to business columnist Kathy Kristof. Frankly, she makes a good point:
Reform was (and is) needed for people who cannot get coverage at any price and are sick with serious ailments, like cancer and Multiple Sclerosis, that would bankrupt a family trying to pay those bills on their own. And yet, we consistently allow ourselves to be distracted by the trivial-the woes of someone who doesn’t think she should have to pay a modest amount more for health insurance because she’s voluntarily getting a “little adjustment” so she can “feel awesome” after she works out. - Kathy Kristof
**Click here to read Kathy’s column on CBS MoneyWatch, about Why Health Insurance Reform is Dead.
Toyota Replaces One Unsafe Car with Another
January 28, 2010
By Angie Moreschi:
“I’ll never forget,” said Jon Newcomer, “Their exact words were: ‘We’re condemning your vehicle. We’ve deemed it unsafe for the road.’” That was the unfortunate news this Hudson, New York man received this week when he took his Toyota Tundra truck into his dealership in Kingston, New York to have a brake problem checked out.
As if that wasn’t bad enough, the dealer turned around and gave him a 2010 Toyota Corolla as a loaner car. That doesn’t sound so terrible, except, as it turns out, the Corolla is on the recall list for possible sudden acceleration problems. Something Newcomer says they conveniently forgot to tell him.
“I’m definitely not happy about it, because I’m putting my wife and kids in this Toyota Corolla,” Newcomer said. “I’m angry that they replaced my unsafe vehicle, with a vehicle that’s likely even more unsafe.”
Toyota is in the midst of a recall nightmare, because of growing safety concerns about sticking gas pedals that have led to the sudden, unexplained acceleration in several of its most popular models.
From Bad to Worse
It all started when Newcomer began having brake problems with his 2000 Toyota Tundra and took it into his local mechanic. “He told me it had a serious frame problem that he couldn’t handle,” Newcomer said. So he decided to take his truck to the dealership.
That’s when Newcomer learned his Tundra was actually part of an earlier Toyota recall for frame rot, which could lead to rear brake failure. “I was definitely a little stunned, because I didn’t receive any recall notification at all, nothing in the mail. I only found out about it, because I brought my truck in.”
Newcomer says the dealer didn’t handle the situation well. They had very little information for him on how his condemned car situation would all be resolved. They did say, however, they would give him that loaner vehicle until they could figure out what to do. But Newcomer says, the fact that they gave him a recalled vehicle as a loaner is quite remarkable, if not down right irresponsible. “I’m not happy at all,” he said. “It really upsets me.”
Toyota dealers were first notified last week that the Corolla was on the recall list. Then, dealers were ordered by Toyota on Tuesday not to release those vehicles from inventory.
Driving an unsafe car
Newcomer spent most of the day Wednesday trying to figure out what to do with his recalled loaner car. He says the dealership offered to do an inspection on the Corolla to determine if it’s safe to drive, but he was having none of that.
“The woman on the phone said it’s only affecting 1% of 100 cars and only cars with high mileage. She said I’d be able to feel some resistance in the gas pedal, if the car was affected. I told her, ‘Ma’am, that doesn’t make me feel one bit better.’”
Ultimately, they told him to drive the car back to the dealership, and they would give him a different loaner car, not on the recall list. “So now, I have to leave work early to drive this unsafe car 30 miles to remedy the situation, but what options do I really have?”
Unfortunately, Newcomer, like thousands of other Toyota customers, is stuck. “I’m disappointed in Toyota, he says, “They claim to be this dependable, long-lasting vehicle, and now we’re seeing that’s not the case.”
Newcomer says the dealership told him they’re dealing with the recalled vehicles on “a case-by-case basis,” which he found unnerving. “That certainly doesn’t make me feel confident. Am I gonna be one of the individuals that doesn’t get what’s due to them, or will I be one of the individuals who’s taken care of?”
A lot of people are asking that same question.
What’s Next?
As far as his condemned Tundra, the dealer now tells Newcomer Toyota Corporate will be in touch to make him an offer on buying the truck back. “I feel like I’m left flapping in the wind. They said it could take as long as one month or even four months. They didn’t know,” he said.
It’s bad enough being a Toyota owner these days, with all the fear and uncertainty about your car suddenly accelerating and possibly becoming a death trap. At the very least, you’d think the company would work a little harder on creating better customer relations.
**Click here to see Dow Jones Newswire Columnist Al Lewis’ take on the Toyota crisis and his wry advise for customers.
**Click here for an editorial on how the Toyota brand is being affected by the recall crisis.
Fun Facts About Your Income Taxes
January 26, 2010
By John Newcomer:
By now you are starting to get those 1099i’s in the mail. Yes, those pesky, little forms that let you know you earned a whopping $12.92 interest on your meager savings account. Just as daffodils signal that Spring is around the corner; your soon to arrive 2009 W-2 means that tax return preparation season is almost upon us.
How complicated is the U.S. Tax code? The first tax code (1913) was 400 pages. It is now 70,320 pages long! If you placed the pages end to end, the code is more than a 13 mile journey. It is so complicated that more than 60% of all filers have to use the services of professional tax preparers to fill out their return.
How about this for Irony?
Back in 1952, when the tax code was a mere 20,000 pages, Joseph Nunan was convicted of income tax evasion and sentenced to 5 years in prison. Joseph Nunan’s previous job was Commissioner of the IRS! If he could not figure out the income tax code, then what chance does the average citizen have?
Really, come on? 70,000 pages!!!
Existing Home Sales Drop
January 25, 2010
Another blow to the housing recovery. Existing home sales fell in December by 16.7%. The drop was much larger than anticipated. It was expected that sales would decline somewhat from November to December, because November was slated to be the last month for the federal government’s $8,000 tax credit for new homebuyers. But lawmakers extended that deadline through April 30th and added a new credit of up to $6,500 for some existing home owners who move.
Positive Note
The median price of homes sold in December was $178,300, a 1.5% gain over December 2008. That was the first year-over-year gain in the median price since August 2007. Distressed properties made up 32% of the houses sold during the month.
Click here to read more at CNNMoney.com.
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