Media correcting the lies

It is satisfying to know that persistence in correcting false information pays off. 

One of the on-going lies about Obamacare is that it imposes a tax on small businesses.  This lie has been told over and over by the National Federation of Independent Business (NFIB) that has taken millions of dollars from GOP-related organizations in order to attack the healthcare reform law.

GOP Vice-Presidential candidate Paul Ryan repeated this lie in his speech at the Republican National Convention Wednesday evening.  Fortunately the national media has heard the truth from those like me who want to see Obamacare successfully enacted. 

In a Washington Post story yesterday under the heading “The true, the false, and the misleading: Grading Paul Ryan’s convention speech” was the following.

Paul Ryan declared that the Affordable Care Act would impose “new taxes on nearly a million small businesses.” The Act changes taxes for small businesses in three ways. It provides a tax credit (pdf) to subsidize insurance coverage for which between 1.4 and 4 million small businesses are eligible. It imposes a tax on medical device manufacturers, of which there were only 5,300 (pdf) in the United States in 2007. Finally, it imposes an employer mandate on businesses that do not provide coverage, which will not affect (pdf) businesses with under 50 employees. Most small businesses, then, get a tax cut, and the number of small businesses facing tax increases is about five thousand, far under a million. Ryan’s claim is just false.

Unfortunately, GOP Presidential candidate Mitt Romney didn’t read the fact-checking reviews of Ryan’s speech because last night he gave an abbreviated version of the lie saying of President Obama, “His plan to raise taxes on small business won’t add jobs, it will eliminate them.”

But as for factual information about small businesses, a Gallup poll released this week shows “small-business-owner satisfaction is up sharply.”

…despite the challenges small-business owners face, 55% are extremely or very satisfied with being a business owner and another 29% are somewhat satisfied, for a combined 84% saying they are satisfied to some degree with being a small-business owner.

This doesn’t sound like all small-business owners have succumbed to the fear the NFIB and some politicians are trying to instill in them with lies about Obamacare.

 

South Carolina: Proposed workers’ comp hike cut by 58%

Yesterday the S.C. Consumer Advocate, the South Carolina Small Business Chamber of Commerce and the National Council of Compensation Insurance (NCCI) reached a settlement on a proposed 7.3% average increase sought by the workers’ compensation insurance industry.

The settlement reduces the NCCI proposed hike by 58%.  Starting in September 1, workers’ compensation carriers will be able to adjust their premiums using only a 3% average increase in loss costs.  (See WorkCompCentral.com story below.)

“Yesterday was a great day for the small businesses of South Carolina,” said Frank Knapp, Jr., president and CEO of the South Carolina Small Business Chamber of Commerce (SCSBCC).  Since 2005 the SCSBCC had intervened in workers’ compensation cases numerous times always with great success.  This 58% decrease in a proposed hike matches a similar result in May of 2008. 

The settlement also included an agreement by NCCI to withdraw an appeal of a Court of Appeal ruling earlier this year that required all NCCI proposed workers’ comp adjustments to be subject to a hearing before the Administrative Law Court.  Until that ruling, the law was being interpreted as not allowing the Consumer Advocate to contest an average decrease in loss cost even if the data would have called for more of a drop.

“Small businesses now can be assured that any overall changes in workers’ compensation rates will be based on an objective vetting of premiums paid and carrier payments made to workers and healthcare providers,” said Knapp.  “We will no longer have to trust the industry’s math because we were locked out of the filing process.”

Knapp gave credit to the partnership between the SCSBCC and the State Consumer Advocate, Elliott Elam, for the continued success in protecting small businesses from unwarranted workers’ comp rate increases.  “Thanks to the Injured Workers Advocates for providing the legal services that enables the Small Business Chamber to intervene in these cases.  Bill Smith (Chappell, Smith & Arden) and Kevin Holmes (Steinberg Law Firm) have worked very hard without compensation on these cases over the years on behalf of the state’s small businesses and we are very appreciative.”

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WorkCompCentral.com
August 29, 2012

NCCI Reaches Settlement in Latest Court Fight over Loss Costs

By Michael Whiteley, Eastern Bureau Chief

South Carolina Consumer Advocate Elliott Elam Jr. and a group of small businesses reached a settlement in the latest in a series of administrative court battles with the National Council on Compensation Insurance (NCCI) on Monday and agreed to a 3% increase in loss costs, effective Sept. 1.

Elam and the South Carolina Small Business Chamber of Commerce said the agreement, approved by Chief Administrative Law Judge Ralph K. Anderson III on Monday, resolves a three-year legal challenge over loss-cost notice requirements.

The agreement cuts NCCI's pending loss-cost request by more than half. Last February, NCCI had filed for a 7.3% loss-cost increase to take effect on July 1.

Elam said Acting State Insurance Director Gwendolyn Fuller McGriff also approved the settlement. The South Carolina Insurance Department did not return telephone calls on Tuesday.

As part of the settlement, NCCI also agreed to drop its appeal of a Feb. 22, 2012, ruling by the South Carolina Court of Appeals that required the Insurance Department to post notice of all loss-cost changes, regardless of whether overall averages increase or decrease.

Both NCCI and McGriff argued state law requires notice only when the average for loss costs covering the state's 700 job classification codes goes up.

Elam argued that, without official notice, he had no standing to challenge loss-cost changes and ask the state's Administrative Law Court to force NCCI to divulge the details of its filings.

"This brings certain stability back to the market, and now we can start moving forward," Elam said on Tuesday. "With every loss-cost filing, regardless of whether the overall average increased, somebody was getting a rate increase."

Small Business Chamber President and Chief Executive Officer Frank Knapp Jr. said the settlement makes it clear that Elam and his successors can challenge loss-cost filings even when overall averages decline.

"These filings are a little bit math and a little bit art," Knapp said. "We're quite pleased that the proposed rate increase has dropped by more than 50%."

The South Carolina Consumer Advocate's Office has filed a series of challenges to NCCI's filings dating back to 2001. Elam said South Carolina law does not provide for rate hearings within the Insurance Department.

NCCI's call to boost loss costs by 32.9% in 2005 led to more than a year of legal wrangling in the state administrative law court. Former Chief Judge Marvin Kittrell reduced the increase to 18.4%, effective Dec. 1, 2006.

NCCI filed for another 23.7% increase in April 2007, but reached a settlement with Elam and the Small Business Chamber in May 2008 that limited the overall increase to 9.8%.

The double-digit increases prompted a series of workers' compensation reforms approved by the South Carolina Legislature in June 2007.

Following the reforms, NCCI obtained Insurance Department approval to cut loss costs by 0.3% in 2009 and by another 9.8% in 2010.

But Elam contested both filings, arguing that the South Carolina Insurance Department provided no notice of the filings and did not make the data available. Elam lost the challenge to the notice requirement in state administrative court and took the case to the state Court of Appeals.

The appeals court ruled on Feb. 22, 2012, that South Carolina employers have a right to know when loss costs change, because it can affect their individual premiums.

"Under the DOI's interpretation, an insured might get notice of the filing one year and might not get notice the following year, even though that insurer's loss costs increased in both years," the appellate court ruled. "Such an arbitrary result cannot have been intended."

Both McGriff and NCCI filed writs of certiorari asking the South Carolina Supreme Court to intervene. The petitions were pending when the parties reached the settlement on Tuesday.

The settlement calls for:

The state to approve an increase in loss costs averaging 3% in the voluntary market and to reduce loss costs by an average of 3.1% for "F" classifications – which apply to workers covered by the U.S. Longshore and Harbor Workers Act.
The Insurance Department and NCCI to withdraw their petitions for certiorari within 10 days of the settlement's approval.
Elam to withdraw pending challenges of previous loss-cost changes.
The parties to agree that NCCI's filings for 2009, 2010 and 2011 were not "excessive, inadequate or unfairly discriminatory."


NCCI State Relations Executive Amy Quinn could not be reached for comment on Tuesday.

In its annual state advisory forums, NCCI reported that, prior to the settlement, South Carolina would have experienced the third largest loss-cost increase in the Southeastern region. Mississippi regulators approved a 9.9% loss-cost increase that took effect on March 1.

Florida Insurance Commissioner Kevin McCarty approved an 8.9% rate increase, effective Jan. 1, 2012, and is considering NCCI's call to increase rates by another 6.1% next January.

NCCI reported that 2012 loss costs or rates increased in seven states in the region and declined in five others. Alabama regulators approved a decrease of 9.3%, the steepest cut in the region, effective March 1.

Knapp said the settlement will streamline future loss-cost challenges.

"Small businesses now can be assured that any overall changes in workers' compensation rates will be based on an objective vetting of premiums paid and carrier payments made to workers and health care providers," Knapp said.

Recipe of obstruction

As the party conventions roll out this week and next, big business and its lobbying organizations like the Business Roundtable will be making big political donations and entertaining the influential in style.  Their collective message, says Donald Cohen, will be about “the ‘burden’ and ‘uncertainty’ of government action to remove toxic air pollution, stop climate change, stem the dramatic increase of workplace repetitive stress injuries like carpal tunnel and give consumers information about calories in our Big Macs and human rights abuses built into our iPhones.”

In his opinion editorial in The Huffington Post Cohen scolds big business for its consistent failure to acknowledge the problems it creates and its resistance to finding real solutions.    

“They use a cookbook of standard rhetorical devices and public relations campaigns designed to avoid responsibility for the pollution they create, the unsafe food and consumer products they produce, the dangerous work conditions they manage and the complex, indecipherable and ultimately dangerous financial devices they invent,” writes Cohen.

Cohen lists big business’s recipe of obstruction:

“First, they deny. Remember, smoking doesn't cause cancer, global warming is a hoax, fats and sugars don't cause obesity and the list goes on and on.

Second, they say it's not their fault. Remember, it's the "nut behind the wheel" that caused auto accident deaths, irresponsible workers cause workplace accidents, and women earn less than men because they just don't have the skills.

Third, they say the free market, not government action, will take care of problems. Business leaders assured us they just wouldn't produce unsafe cars, food or toys since consumers wouldn't buy them, financial markets will spread risk and self-correct and employers wouldn't be able to hire workers if their workplaces were unsafe.

Fourth, they brand every new rule as a job killer. They said seat belts would kill the auto industry, the Americans with Disabilities Act (ADA) would be a "disaster for U.S. business" and the minimum wage will destroy civilization as we know it.

Fifth, they bemoan the loss of American freedom. Social Security was "the end of democracy," the minimum wage is an "alien philosophy" and calorie counts on restaurant menus puts government in control over what we eat.

Sixth, they warn that unintended consequences will actually make the problem worse. Child-resistant caps on drugs and toxic household products would "lull" consumers into unsafe behavior, raising the minimum wage hurts poor workers and understandable credit charges would only confuse consumers.

And seventh, they claim that it just can't be done. Remember, catalytic converter technology to reduce auto pollution didn't exist, nor did substitutes for asbestos or ozone-depleting chemicals (CFC's).”

Cohen wants corporate America to “end their campaign of denial, delay and obstruction and become part of the solution to America’s most pressing problems.”

That would be great.  But for right now I would just like big business interests to stop using one of their most popular and effective tactics of obstruction not on Cohen’s list—protecting small business.

Whenever you hear big business claim they oppose a solution to a problem because it would hurt small businesses, just start laughing.  We can talk for ourselves and we want to help solve the country’s problems—not obstruct.

Poisoning our children

Retailers of back to school clothing are seeing parents and older school-age children holding out before going all in on purchasing.  It’s all about being fashionable.

In an interview with the New York Times, Amazon’s fashion president Cathy Beaudoin says that waiting until after Labor Day to buy clothes for older kids allows the students to see what others are wearing.   Janney Capital Markets’ Adrienne Tennant said, “with young girls, when you’re going into a big trend season, the early adopters will certainly be there, but the fashion followers will buy some stuff to start themselves off with, but go back to school and make sure they got the right color, the right fit and the right trend.”

Unfortunately this fashionably later buying did not happen for our youngest children in school.  Had the parents of these children waited until this week to buy their kids new backpacks, lunchboxes, binders, rainboots and raincoats, their children might not be wearing and toting products with toxic chemicals that “have been linked to birth defects, infertility, early puberty, asthma, ADHD, obesity, diabetes, and cancer.”

According to a new report released this weekend by Center for Health, Environment and Justice’s Green Schools Campaign and the Empire State Consumer Project:

"New laboratory tests reveal children’s vinyl “back‐to‐school” supplies are laden with hidden toxic chemicals harmful to children’s health. This new investigation demonstrates that popular children’s school supplies contain elevated levels of phthalates, hazardous chemicals that have been banned in toys, yet remain widespread in vinyl back‐to‐school supplies."

Phthalates are toxic chemicals primarily used to soften vinyl plastic.  They are particularly hazardous to young children even at low levels. Congress banned these chemicals from being used in toys, baby bottle nipples, pacifiers, etc. aimed at children in any amount greater than 0.1 percent of the mass of the entire product. 

But as this new investigation reveals, your older children are coming in contact with school supplies and apparel containing up to 69 times the toxic chemicals banned from toys.  Here are some of the products that pose a serious danger to your child:

Amazing Spiderman Backpack

Dora the Explorer Backpack

Brave Backpack

WVE “The Rock” Backpack

Disney Princes Lunchbox

Amazing Spiderman Lunchbox

Access Bag N Pack Lunch Bag

Fridge Green 6 Can Cooler

Pink Tinted View 1.5” Hard Binder

Brown Polka Dot/Hot Chocolate 1” Hard Binder

Smart Fit Kids Multi Rainboot

Smart Fit Kids Pink Rainboot

Disney Princess Rose Kids Rainboot

Disney Rain Slicker—Minie Mouse

Spider Sense Spiderman Youth Rain Poncho

And the danger to your family is not just from these products for children.  These phthalates are still widely used in other vinyl products and “have been found in the air and dust of our homes and schools, our bodies, blood and breast milk.”

Congress should update the Toxic Substances Control Act, a 36-year old out dated federal law that is failing to protect the consumers, especially our children.  The public doesn’t think it is fashionable for businesses to be poisoning our kids with toxic chemicals.  And on behalf of the nation’s small businesses, we don’t want to sell products with these chemicals that are hazardous to the health of our children.    

Big business is doing fine

“Big business is doing fine in many places – they get the loans they need, they can deal with all the regulation. They know how to find ways to get through the tax code, save money by putting various things in the places where there are low tax havens around the world for their businesses.”

Those are the words of GOP Presidential candidate Mitt Romney spoken in Minnesota yesterday.

If big business is doing fine, why aren’t they hiring?  Why are small businesses with fewer than 50 employees accounting for about 50% of all new hires every month this year while businesses with over 500 workers accounting for less than 10% of the new workers. 

We have been continuously told that regulations were stopping big business from hiring.  Now Romney says that is not the case because “they can deal with all the regulation.” 

We also know from survey after survey that small businesses don’t think regulations are a big problem and obviously they aren’t because small businesses are leading in job creation.  So Romney’s comment that small businesses are being “crushed” by regulations is simply not factual.

What is holding back small business growth besides the number one problem of lack of consumer demand is lack of financing.  Ever since the economy crashed due to the reckless gambling of Wall Street, financial institutions have severely restricted loans and lines of credit to small businesses making it extremely difficult for these businesses to grow even as consumer demand is picking up.

But not so for big businesses.  Romney admits that they have no problem in getting loans.

So what is holding big business back from investing in American jobs?

Romney makes that very clear—GREED. These multinational corporations and big business giants simply are hording their profits in “low tax havens around the world”, tax avoidance tactics that are available only to big corporations and wealthy individuals.

And Romney knows what he is talking about because his old company Bain Capital is deep into hiding money offshore.  Today’s news reveals a new tax gimmick involving offshore tax havens used by Romney’s investments in Bain Capital and others to hide even more money from being taxed appropriately—blockers.   

My friend Rebecca Wilkins, senior counsel with Citizens for Tax Justice, told ABC news what a blocker is.  “The blocker is a paper company that serves as a buffer between the investor and the fund holding the investments, Wilkins explained.  That means the investment income can be counted as a dividend and in some cases avoid income tax.”

"It just confirms what everyone already believes about the tax system -- that it's rigged. That the rules are rigged to favor the well off,” said Wilkins.

Every tax dollar big business and the wealthy hide from U.S. taxes so they don’t have to pay for government services that they enjoy (military defense, roads & bridges, education, the courts, etc.) is an extra tax dollar small businesses and the average American has to pay to subsidize the tax evaders.

We’re all paying big business’s fair share of taxes.  No wonder they are doing fine.

Future reading on the U.S. Chamber

I had a long conversation with Hillary Brenhouse this morning.  She is doing research and interviews for a new book about the U.S. Chamber of Commerce, its history through current events.  The author of the book is Alyssa Katz, author of Our Lot: How Real Estate Came to Own Us (Bloomsbury, 2009).  Ms. Katz is also editor of the New York World, an accountability journalism project at Columbia Journalism School.

Obviously, Hillary was looking for the small business perspective on the U.S. Chamber.  Anyone who has followed my writings and comments in the press knows how I feel about that organization. 

She was particularly interested in efforts to create alternative business organizations to the U.S. Chamber.  Having been a part of growing the American Sustainable Business Council and working with the Main Street Alliance and Small Business Majority, I assured Hillary that in spite of not having the big membership dues of giant corporations, alternative organizations are growing. 

If you want to share your thoughts with Hillary on this subject, email her at hbrenhouse@gmail.com.  But be careful what you say, you just might find yourself in print in about 10 months.

 

Patients Would Pay More if Romney Restores Medicare Savings, Analysts Say

New York Times
August 22, 2012

By Jackie Calmes

Mitt Romney's promise to restore $716 billion that he says President Obama "robbed" from Medicare has some health care experts puzzled, and not just because his running mate, Representative Paul D. Ryan, included the same savings in his House budgets.

The 2010 health care law cut Medicare reimbursements to hospitals and insurers, not benefits for older Americans, by that amount over the coming decade. But repealing the savings, policy analysts say, would hasten the insolvency of Medicare by eight years — to 2016, the final year of the next presidential term, from 2024.

While Republicans have raised legitimate questions about the long-term feasibility of the reimbursement cuts, analysts say, to restore them in the short term would immediately add hundreds of dollars a year to out-of-pocket Medicare expenses for beneficiaries. That would violate Mr. Romney’s vow that neither current beneficiaries nor Americans within 10 years of eligibility would be affected by his proposal to shift Medicare to a voucherlike system in which recipients are given a lump sum to buy coverage from competing insurers.

For those reasons, Henry J. Aaron, an economist and a longtime health policy analyst at the Brookings Institution and the Institute of Medicine, called Mr. Romney’s vow to repeal the savings “both puzzling and bogus at the same time.”

Marilyn Moon, vice president and director of the health program at the American Institutes for Research, calculated that restoring the $716 billion in Medicare savings would increase premiums and co-payments for beneficiaries by $342 a year on average over the next decade; in 2022, the average increase would be $577.

Beneficiaries, through their premiums and co-payments, share the cost of Medicare with the government. If Medicare’s costs increase — for instance, by raising payments to health care providers — so, too, do beneficiaries’ contributions.

And those costs would be on top of the costs involved with a full repeal of the health care law, which would eliminate expanded coverage of prescription drugs, free wellness care and preventive checkups.

Read more

“Government should run more like a business”

How many times have we heard this line, "government should run more like a business"?

Unfortunately the line is usually effective in ridiculing government budgets and programs even though those who use it often don’t have the foggiest idea of how businesses are run.

For instance, because our federal government borrows money to operate we’re told by faux fiscal hawks that businesses have to live within their means and so should government.  But that is absolutely not the way most large businesses operate.  These big guys and even small guys are always borrowing money to operate, innovate and expand.  They borrow money or sell stocks so they can better serve their customers.

Recently in South Carolina the General Assembly voted not to pass on any additional premium costs to the workers and retirees while at the same time giving the workers a well-deserved raise after years of stagnant wages. 

Then the state’s Budget and Control Board, a uniquely South Carolina 5-headed administrative budget oversight committee, voted earlier this month to make state workers pay half of the increase in their health insurance premiums.  A battle has erupted between the Legislature and Governor Nikki Haley, who lead the charge on the Budget and Control Board to make workers and retirees pay more.

Now into the controversy steps the executive committee of the state’s Republican Party which is supporting Governor Haley over the Republican-dominated state legislator.  The executive committee adopted a resolution that says, “the state government ought to operate more like a private business than a bureaucracy.”

Well, this 90-something person group obviously doesn’t know that many businesses pay all of the health insurance premiums for their employees.  These businesses consider such an employee benefit part of the compensation package.  Is this GOP executive committee suggesting that such businesses aren’t operating like a private business?

But the real problem with the “government should run more like a business” line is that government, unlike most businesses, doesn’t have a single decision-maker.  The South Carolina General Assembly is a 172-member body each with a vote.  Decisions are reached through compromise and consensus. 

In the matter of these insurance premiums, the Legislature strongly believed that not passing on additional health insurance premium costs to its workers was in the best interest of the business called state government and its hard workers.  That’s called running government like a business.

Opposing workers’ comp and SCE&G rate hikes

The workers’ compensation insurance industry and SCE&G both have hearings in the coming months regarding their requests for more revenue.  The South Carolina Small Business Chamber of Commerce (SCSBCC) and its president and CEO, Frank Knapp Jr., will intervene to oppose both rate hikes.

The SCSBCC is joining the S.C. Consumer Advocate’s Office in pushing back on a 7.3% average increase filed by the National Council on Compensation Insurance.  The Administrative Law Court is scheduled to hear the case starting October 8, 2012.  Representing SCSBCC from the Injured Workers Advocates will be Bill Smith of Chappell, Smith & Arden and Kevin Holmes of the Steinberg Law Firm.

“Since 2005 Bill Smith and Kevin Holmes have formed an effective team with Elliott Elam, the state Consumer Advocate, to successfully fight against proposed increases in workers’ compensation insurance costs to businesses,” said Mr. Knapp.  “Because of our efforts, Administrative Law Judges have ordered up to 44% decreases from the insurance industry’s requests.”

On November 27 the S.C. Public Service Commission will begin hearing a 6.61% overall electricity rate hike being sought by SCE&G, which serves 668,000 residential and commercial customers in South Carolina.

Mr. Knapp will officially intervene in the hearing to oppose the hike as he has done effectively since 2004.  He has worked closely with the S.C. Office of Regulatory Staff in these rate cases resulting in proposed hikes being reduced by up to 50%.  Mr. Knapp does not need legal representation in these hearings because he is intervening personally as a residential and commercial customer of SCE&G. 

“SCE&G’s parent company, SCANA, saw its earnings increase by 29% in the second quarter of this year,” said Mr. Knapp.  “In addition the company is justifying its request by saying it needs a return on equity almost 0.5% higher than the current rate for Duke Energy.  Small businesses simply want to tell SCE&G “NO”.  Fortunately I will have that opportunity.”

Protecting cancer-causing chemicals is not good for small business

Since when is protecting cancer-causing chemicals good for small businesses?

That is one of the arguments Congressional supporters of an effort to defund the annual “Report on Carcinogens” (ROC) are making.

The ROC is produced by the National Institutes for Environmental Health Science. The NIEHS does not test the chemicals.  It reviews scientific literature from academic, government and some industry studies to produce the ROC for information only. The ROC can be used by industry as a guideline for choosing safe chemicals in their consumer products and by the public to know what chemicals to stay away from. The ROC does not stop a business from using any chemicals.

The major push to defund the ROC seems to be coming from the formaldehyde chemical producers.

You might be asking, “Who would put formaldehyde or other toxic chemicals in consumer products?” 

Apparently a lot of companies.  They just don’t usually list them on their products because they aren’t technically “ingredients”.  But they are in the products.

The ROC has specifically listed formaldehyde as a carcinogen and the corporations producing the chemical, like Koch Industries and its subsidiary Georgia Pacific, have struck back with PAC campaign contributions to Congressmen like Representative Denny Rehberg who sponsored the budget amendment to defund the ROC for two years.

The corporate carcinogen-chemical-producing companies should be concerned about the ROC.  Environmental and consumer groups have put pressure on companies like Johnson & Johnson, Estee Lauder Companies, Procter & Gamble, Avon and L’Oreal to stop using toxic chemicals in their products.

This week, Johnson & Johnson became the first of such companies to declare that it would stop using formaldehyde in all its products by 2015.  The company had previously promised to remove other toxic chemicals in baby products by 2013.

Without the government’s ROC, the public would be left in the dark in these matters.  Even better than this transparency would be actual regulations prohibiting cancer-causing and other toxic chemicals from all consumer products.  But in today’s political environment, this kind of common sense won’t fly.

This is why the ROC is so important.  While public pressure might cause chemical manufacturers some money to develop safer chemicals, the ROC is certainly not hurting small businesses.   No small business-owner wants to put the health of customers, workers and his/her own family at risk.  We sell the products that are available and we want them to be safe. 

In addition the ROC also is a guide to small businesses that don’t want to use toxic chemicals in the products they make.   Letters from small chemical and consumer product manufacturers and the American Sustainable Business Council have been sent to Congress in support of funding of the ROC. 

Below are the addresses and fax number of the appropriate members of Commerce if you would like to weigh in on this issue.  Hurry!

The Honorable Daniel Inouye Chairman Senate Appropriations Committee S-128 Capitol Building Washington, DC 20510 (fax 202-224-6747)	The Honorable Thad Cochran Ranking Member Senate Appropriations Committee S-146A Capitol Building Washington, DC 20510 (fax 202-224-9450)
The Honorable Tom Harkin Chairman Subcommittee on Labor, Health & Human Services, Education & Related Agencies Appropriations Room 131 Dirksen SOB United States Senate Washington, DC 20510 (fax 202-224-9369)	The Honorable Richard Shelby Ranking Member Subcommittee on Labor, Health & Human Services, Education & Related Agencies Appropriations Room 156 Dirksen SOB United States Senate Washington, DC 20510 (fax 202-224-3416)
The Honorable Harold Rogers Chairman House Appropriations Committee H-307 Capitol Building Washington, DC 20515 (fax 202-225-0940)	The Honorable Norm Dicks Ranking Member House Appropriations Committee 1016 Longworth House Office Building Washington, DC 20515 (fax 202-225-9476)
The Honorable Denny Rehberg Chairman Subcommittee on Labor, Health & Human Services, Education & Related Agencies Appropriations Room 2358 Rayburn HOB U. S. House of Representatives Washington, DC 20515 (fax 202-225-5687)	The Honorable Rosa DeLauro Ranking Member Subcommittee on Labor, Health & Human Services, Education & Related Agencies Appropriations Room 1016 Longworth HOB U. S. House of Representatives Washington, DC 20515 (fax 202-225-4890)

Euro zone austerity shrinks economy

Count your blessing that the United States did not put deficit reduction over stimulating jobs as our solution to the Great Recession.  Europe’s austerity approach has given them no blessings to count.

 “The euro zone's…economy shrank in the second quarter, having flatlined in the first, despite continued German growth which economists said could soon be snuffed out,” read the first line of a Reuters story yesterday.  “The 17-nation currency bloc contracted by 0.2 percent on the quarter data showed on Tuesday.” 

Economists say it is likely to get worse.

While there was anemic growth of 0.3 percent or less in Germany, Austria and the Netherlands and France had zero growth for the third consecutive quarter, the news was very bad for the other European countries.

How much did some of these national economies drop.

Cyprus down 0.8 percent.

Finland down 0.7 percent.

Greece down 6.2 percent.

Italy down 0.7 percent.

Portugal down 1.2 percent.

Spain down 0.4 percent.

"Overall it confirms the idea that the euro zone is in a recession phase," Aline Schuiling, economist at ABN AMRO, said.  "What we see is a vicious circle of budget cuts, high interest rates in the periphery and sovereign debt rising…We expect another contraction in Q3."

According to the Reuter’s story there is a “growing debate inside and outside Europe about the sense of austerity drives.”

What definitely doesn’t make any sense is for there to be any debate about the U.S. following the austerity, cut-the-deficit-priority European model.

NFIB exposed…again

The first time I mentioned Bill Dunkelberg in my blog was two years ago.  Mr. Dunkelberg is the chief economist of the National Federation of Independent Business (NFIB), Professor Emeritus of economics at Temple University and chairman of Liberty Bell Bank in New Jersey. 

Unfortunately, in spite of all those distinguished positions, Mr. Dunkelberg is not a very good prognosticator and certainly not a friend of the nation’s 30 million small businesses.

In 2010 he led the NFIB’s PR campaign against the Small Business Lending Fund the Obama Administration wanted to create in order to encourage community banks to start making small business loans.  Mr. Dunkelberg said that passage of the Lending Fund would lead to “bad loans” that would result in the same kind of financial collapse that resulted from the housing bubble.

Well, the Lending Fund was established and while it has not been a great success in getting banks to meet the demand for small business loans, we also haven’t heard about bad loans threatening the entire financial industry. 

Last week Mr. Dunkelberg’s credentials as a small business advocate for the NFIB were again on display in an interview on WHYY, a Philadelphia public radio station, along with John Arensmeyer, founder and CEO of the Small Business Majority.

Mr. Dunkelberg made it painfully clear who he and the NFIB consider worthy small businesses.  Although there are 30 million small businesses in the country, only 6 million have employees other than the owner according to Mr. Dunkelberg and “those are the ones we worry about” he said.  The other 24 million sole proprietors he dismissed as “little businesses”. 

In Mr. Dunkelberg’s ivory-tower world, almost all the 6 million small-business owners that the NFIB “worries” about would pay higher personal income taxes if the Bush tax cuts end as scheduled for individuals making over $200,000 or joint taxpayers making over $250,000 a year.  Amazingly Mr. Dunkelberg proclaimed, “200-thousand.  250-thousand.  It’s hard to make a lot less than that.”

What?

In a national survey conducted by Lake Research last December for the American Sustainable Business Council, Main Street Alliance and Small Business Majority, only 3% of small businesses with employees other than the owner self-reported family incomes of over $250,000.  That is right in line with all other polling on this issue. 

If Mr. Dunkelberg is so wrong about the incomes of the vast majority of small-business owners, what else is he and the NFIB wrong about?

How about the demand for small business loans?  Since Mr. Dunkelberg is the CEO of a bank he should be an expert on this?

In the radio interview, Mr. Dunkelberg said, “When I talk to all these bankers across the country and also at our bank we find that for the most part that nobody wants more money.  The reason is we have more firms that think the economy will be worse 6 months from now than think it will be better.  We have more firms that think that their real sales will be lower six months from now than it is today.  And we have virtually nobody who thinks it is a good time to expand.”

No small business wants to expand?  No small business needs a loan?  Sounds like a typical bank CEO who listens only to other bankers and wants to sit on his money waiting for the perfect, no-risk small-business loan application.

But at least NFIB’s own survey of its members backs up Mr. Dunkelberg’s opinion.  In May 91% of NFIB members self-reported that they had all the credit they needed.  Only 3% said that financing was their biggest problem. 

However another survey in May by the National Small Business Association found that 43% of its members have wanted loans in recent years but couldn’t get financing.  In June Sam Graves, Republican Chairman of the U.S. House Committee on Small Business wrote, “One of the biggest issues faced by small businesses today is the inability to access sufficient credit and capital.” 

Not only is there demand for small business loans, contrary to Mr. Dunkelberg’s assertion, some small businesses are actually getting the credit they need.  A Gallup poll back in February found that 15% of small businesses were hiring primarily because of the need to expand their business operations and increased consumer demand.  But still not all of even these businesses were getting as much financing as they wanted.  The poll found that one third of the small businesses hiring were adding fewer employees than they needed.

Additionally, the Gallup poll disagrees with Mr. Dunkelberg’s portrayal of small business pessimism.  “Right now, economic confidence is approaching its highest levels in the last four years.  U.S. small-business owners are also about as optimistic about their business and their future hiring as they’ve been at any point during that time,” said Gallup’s chief economist. 

So small businesses are looking for financing, some are expanding and optimism is returning.

All of this means one thing.  Mr. Dunkelberg and the NFIB do not represent most small businesses in this country. 

Maybe the 300 to 350 thousand small businesses the NFIB claims as members consist of all the 3% of small-small business owners that take home over $250,000 a year.  And maybe these NFIB small-business owners don’t need any financing and maybe they are terrible pessimistic. 

But one thing is certain.  They and the NFIB don’t represent the rest of us.  

Romney-Ryan's promise of austerity for small businesses

With Congressman Paul Ryan on the ticket with Mitt Romney, it is clear that a Romney-Ryan administration would choose eliminating the federal deficit over creating jobs as their economic plan. 

So what does this mean for small businesses if $6 trillion was cut from federal spending over the next 10 years as proposed by Mr. Ryan and supported by Mr. Romney? 

I’ve warned about such an austerity approach.  It is the road Europe chose during the Great Recession and the economic results have been disastrous.  Last Friday I told you about the dramatic rise in abandoned babies and children by families in Europe that can’t afford to feed and clothe them.

In today’s editorial the New York Times writes,

More than three-fifths of the cuts proposed by Mr. Ryan come from programs for low-income Americans. These cuts are so severe that the nation’s Catholic bishops protested the proposal as failing to meet society’s moral obligations, saying the plans “will hurt hungry children, poor families, vulnerable seniors.”

But aside from our concern for the less fortunate, what happens when government stops supporting the vulnerable in our society or helping states and local governments with education and first responder financing or investing in roads and bridges?  The answer is a dramatic drop in money on Main Street. 

The funds for these programs aren’t being spent on European vacations or the buying of more stocks or paying for big bonuses for corporate executives.  That is what the wealthy and big corporations will do with their $4 trillion in tax cuts if the Romney-Ryan plan is enacted. 

The money targeted for the austerity budget is being spent today in your local communities.

Main Street will suffer as it has in Europe and especially in Greece and Italy.  And for what?  Even the Ryan budget plan wouldn’t balance the federal budget for 30 years. 

Government austerity is a failed model.  While there will be no austerity for the wealthy and multinational corporations, there will be plenty for small businesses.

Austerity's other failure—babies abandoned in a box

The rallying cry of government budget cutters in the austerity vs. stimulus debate is that they don’t want to burden our children and grandchildren with the country’s debt. 

That certainly is a more appealing argument than the “austerity leads to a healthier economy” baloney.  The evidence is all too clear that while the U.S. economy is only slowly improving thanks to our mediocre stimulus efforts, Europe’s austerity experiment has countries still in a deep recession or worse. 

But what about those children the “shrink the government down to the size where we can drown it in the bathtub” crowd is so concerned about?

According to a CNBC report entitled "Austerity's Cost: Abandoned Children in Europe", the number of abandoned babies and young children across Europe is increasing.  In the last year in Italy child abandonment has gone up over 87% from a year ago and Greece has seen a tenfold rise in abandoned children since 2003.  Many of the babies are left anonymously in a monitored box where it is legal to do so in many European countries.

The National Director of SOS Villages said that because parents are struggling to even feed and clothe their children and the number of these economic orphans is expected to grow.  Data shows that 27.7 percent in Greece are facing extreme poverty. 

Stergios Sifnios of SOS villages told CNBC, “We are really afraid that in the future we will have a big number of families that cannot manage to keep their own children because of these problems. We are trying to be ready for this.”

The other price of the failed economic austerity model—abandoned children. 

Looking for an "oops"

July was officially the hottest month for the United State’s 48 contiguous states—3.3 degrees above the average.  Those high temperatures also contributed to the country’s warmest 12-month period every recorded.

Jake Crouch of the National Climatic Data Center says that it’s more than just daytime highs that scientists are looking at.  He says that “we have also seen very warm nighttime temperatures, and that is part of a long-term trend we’ve seen across the contiguous U.S. over the past several decades.  The hotter days increase the amount of moisture the lower atmosphere can hold, and this means it doesn’t cool off as much at night anymore.”

Republican U.S. Senator Roy Blunt of Missouri wrote in the Springfield News-Leader:

At the end of July, all of Missouri’s counties were designated a state of “severe” to “exceptional” drought — representing the worst level of drought possible. The U.S. Department of Agriculture recently added 218 counties from 12 drought-stricken states to its list of natural disaster areas, bringing the overall total to 1,584 counties in 32 states — more than half of all the counties nationwide.   

According to the USDA’s crop report, half of the nation’s corn crop is now in rated in the worst condition, of “poor” to “very poor,” with Missouri topping the list as one of the hardest hit states.  Meanwhile, approximately 73 percent of the domestic cattle inventory nationwide is located in an area that has been impacted by this drought, and 59 percent of America’s and 99 percent of Missouri’s pasture and rangeland is in “poor” to “very poor” condition, compared to 38 percent a year ago.



We all know what’s going on.  Scientists like James Hansen of NASA have been warning us about extreme weather events as a result of the increased levels of carbon dioxide humans are pumping into the atmosphere.  Climate change has been going on for some time and it is getting worse. 

South Carolina U.S. Senator Jim DeMint, infamous for his resistance to Congress taking measures to address climate change, is notorious for his 2010 tweet that ridiculed the notion of a warming planet.  When Washington was hit with a severe snowstorm that February causing the House to cancel all votes for a week, Mr. DeMint tweeted:

 “It’s going to keep snowing in DC until Al Gore cries ‘uncle’.”

Mr. DeMint was seen earlier today with his cell phone in hand asking a page how to spell “oops”.  (Just wishful thinking.)