Richard Schwab Writes

Subject: Guest Column




Extending benefits helps economy and reduces unemployment

This is no time to end unemployment benefits. There is no economic evidence to support not continuing helping millions of Americans during the worst economic downturn since the great depression. The evidence confirms unemployment benefits fuel jobs and the economy.

And, more importantly, what about our commitment to one another as human beings?

Most economists indicate extending unemployment benefits create $1.63 in demand for every dollar spent. Unemployment benefits are spent quickly and locally.

Individuals seeking jobs no longer get a pay check, but their bills don't stop.

Congress needs to extend unemployment benefits so that struggling Americans can worry about finding a job instead of worrying about feeding their families and keeping a roof over their heads.

U.S. Representative Lloyd Doggett (D-Texas) has recently introduced a bill to preserve benefits through next year. U.S. Senator Jack Reed (D-R.I.) is sponsor of the Senate's companion measure. The Congressional Budget Office scores the bill as having an "out sized effect" on the economy - pumping in double the money. (In addition, individuals pay taxes on unemployment benefits. And, economists have warned that failure to pass an extension would have a negative impact on a struggling economy.)

U.S. Rep. Doggett claimed, " With almost five unemployed Americans for every job opening, too many people remain jobless because of a lack of work, not a lack of wanting to work."

Based on research by The John J. Heldrich Center for Workforce Development at Rutgers University, some myths about unemployment benefits are debunked.

•Overwhelming evidence indicates the jobless who receive benefits more actively seek work than those who don't.

•Two thirds of America's 14 million unemployed are not receiving benefits. (Those who did not work long enough or earn enough are ineligible.)

•Unemployment benefits amount to only a fraction of a worker's previous income. ($296. is the average weekly benefit.)

•80% of those who receive benefits are willing to take a pay cut to get a new job. (It is wrong to suggest Americans want unemployment checks. Americans want work.)

•Benefits raise the re-employment rate of long-term unemployed workers. (700,000 new jobs have been created thanks to emergency and extended unemployment benefits in recent years. And, 3.2 million were pulled out of poverty in 2010 thanks to unemployment benefits.)

Unemployment insurance benefits pump demand into the economy and help the unemployed workers and their families. Extending these benefits is a far better way to help our economy and our workers recover than to ask the American people to borrow $830 billion to give tax breaks to the richest 2% of Americans.

Richard O. Schwab was formerly associate head of school, and middle school head, Cincinnati Country Day School. He is currently neighborhood team leader, Glendale Organizing For America Community Team (www.gofact.blogspot.com)



Richard O. Schwab

Richard Schwab Writes

Republicans obstruct improvements to Americans' financial security


Senate Republicans have blocked President Barack Obama's nomination of Richard Cordray to head the Consumer Financial Protection Bureau (CFPB.) The vote was 53-45 - with one senator voting "present" - falling short of the 60 votes needed to break a Republican filibuster.

Richard Cordray was Attorney General of Ohio, Treasurer of Ohio, and Solicitor General of Ohio. From all accounts, he is an outstandingly competent candidate to head the CFPB. And, talk about bright, he was a five-time "Jeopardy!" champion.

Ayear ago, the President fought fierce lobbying from the financial industry and signed into law the Dodd-FrankWall Street Reformand Consumer Protection Act.

The new law put in place reforms that reduce excessive risk taking onWallStreet.

The law establishes the strongest consumer protections in our history, and creates the Consumer FinancialProtection Bureau. TheCFPBis charged withensuringthat financialservice providerscompeteon thebasisofthe services theyprovideandnoton unfair, deceptive, andhidden fees and harmful practices.

The CFPB cannot exercise its full authorities or make good on the consumer protection goals in the law unless a director is in place.

Brian Deese, Deputy Director of the National Economic Council, indicated, "Non-bank financial companies like payday lenders, mortgage lenders, mortgage servicers, debt collectors, and credit reporting agencies play an incredibly important part in the lives of American families...The non-bank sector is one where we have seen, in the past, some of the most...predatory lending practices in our financial system."

These destructive and non-transparent practices led to the financial melt-down of 2008.

Withouta CFPBDirector,

Americanswillnotbe protectedfromfalling preytomanyofthe damaging practicesthat contributedtothe worstfinancialcrisissincetheGreat Depression.

The CFPBsinabilityto exerciseitsfull

authoritywhileit awaitsaDirector negatively affectsour economy and the security of our financialsystem.

Without a director, the agency designed to shield consumers from the excesses behind the 2008 financial crisis cannot operate at full throttle.

President Obama has responded, "We are not giving up on this...We are not going to allow politics as usual on Capital Hill to stand in the way of American consumers being protected from unscrupulous financial operators."

A question to the Republicans who are blocking Richard Cordray and consumer protections - Whom are you protecting?

Looks to me as if you are in the wrong place and on the wrong side.

Richard O. Schwab was formerly associate head of school, and middle school head, Cincinnati Country Day School. He is currently neighborhood team leader, Glendale Organizing For America Community Team (www.gofact.blogspot.com)

Richard O. Schwab