By Richard E Walrath and Patricia L Johnson

"The female-to-male earnings ratio of 0.77 in 2006 was not statistically different from the 2005 ratio..."

That is a direct quote from the recent "Income, Poverty, and Health Insurance Coverage in the United States: 2006"  released by the U.S. Census Bureau in August of 2007. [1]

In this day and age, why would any person be willing to earn .23 cents less on a dollar just because they are a female?  Are you satisfied earning .77 cents for every dollar the guy in the next chair is making?

Do you sit there and file your nails all day long, or do you put as much effort into your job as anyone else?

Title VII of the Civil Rights Act of 1964 makes it an “unlawful employment practice” to discriminate “against any individual with respect to compensation..." [2]

Are you doing the same job and being paid less than your male counterpart?  If so, you have the right to file a claim with the Equal Opportunity Employment Commission (EEOC), but remember there is a 180-300 day statute of limitations on filing a claim, depending upon the state.

Lilly Ledbetter found out about the statute of limitations the hard way by losing her discrimination case against Goodyear Tire and Rubber.  After winding its way through the lower courts, Ledbetter's case went to the U.S. Supreme Court for a ruling, where the following question was posed:

Whether and under what circumstances a plaintiff may bring an action under Title  VII of the Civil Rights Act of 1964 alleging illegal pay discrimination when the disparate pay is received during the statutory limitations period, but is the result of intentionally discriminatory pay decisions that occurred outside the limitations period.

The Supreme Court came back with a 5-4 ruling against Ledbetter in case 05-1074 LEDBETTER v. GOODYEAR TIRE & RUBBER CO., INC. and the following excerpt reminds us why time limitations are so important. [3]

"Ledbetter should have filed an EEOC charge within 180 days after each allegedly discriminatory pay decision was made and communicated to her. She did not do so,"

Some people just like to keep their jobs, especially since there's a probation period in many of them and they are reluctant to make waves for fear of being being fired.  Your first step should always be to discuss your complaint with your employer - there may be a legitimate reason for the rate disparity. 

Whether you are an hourly employee or a salaried employee, you have the same rights when it comes to wage discrimination in the workplace, but the EEOC isn't going to come seek you out, you must contact them to pursue your claim.

The 180-300 day limit allowed to file a claim is a very short period of time, especially if you are a new employee on the job, but how long does it take to make a phone call to the EEOC for an opinion? 

Maybe there should not be inequality in the workplace, but it's there all right, and, as you can see from the statistics, it's not going to go away any time soon.  A lower rate of pay for doing the exact same job is discrimination - know your rights and fight for them.

As more women inch their way up into the executive ranks and are able to hire more women, the inequality will gradually diminish.

If Hillary makes it to the top, it might help women's pay a lot.  If she doesn't, it's up to you - fight for your rights Ladies!

[1] U.S. Census Bureau [2] Title VII of the Civil Rights Act of 1964 [3] U.S. Supreme Court

By Richard E Walrath

Keith Olbermann, MSNBC Countdown, did a reenactment on his newscast last night about Sen. Larry Craig (R-ID) using the MN police report as the basis. 

I think the Republicans have got it all together now.  They can say, "Vote for Us in '08 now that we've cleaned both the House and the Senate".  They may need to shorten that up a little.

It seems like it would be awfully hard for the Republicans to use smut on any of the Dems with the dozens of cases they now have against them.  It's almost like they're trying to get everything out this year--still four more months to go.

Romney is probably the best they've got, but I don't think he can beat Hillary.  He's flip-flopped so many times times it's hard to keep track.  You can be sure Democratic campaigns keep track.

If they go after Hillary it won't be another Swift-boat Kerry operation.  Clinton is going to have all the money in the world on hand and ready to use--more than enough to help the public remember every day of the Bush years and just who it was that helped make his presidency the worst in the history of this country.

By Richard E Walrath

Prices are too high--if they were about half as much on everything or I had twice as much money, that would be just about right.  I'm sure most people feel the same way.

By Richard E Walrath

United States now ranks 42nd in life expectancy--I hope they move up pretty soon.  I don't have that many years left to wait.

45 million without health insurance, and the myth that the United States health care is the best in the world. 

Part of the reason this country's health system is not the best is not providing health care to 45 million people.  We're hearing almost every day now about another disease that has entered the country.

When there are as many as 45 million without health insurance and/or health care, epidemics are much more likely to occur.

If the United States had the best health care system in the world, there would not be 45 million people without health care and/or health insurance.

Private insurance companies are going all out trying to sign up the uninsured.  The policies are close to worthless--$10 a week to insure your whole family--but wait until you try filing a claim.

By Richard E Walrath

As far as I can see, there's been a big hub-bub about increasing liquidity to relieve the pressure on creditors. 

The ones who are really in dire straits and need the help are the debtors--the ones who are going to lose their homes in the next year, in some cases these people should never have been home owners in the first place.

The creditors are big enough and rich enough to take care of themselves.  If they over-extended themselves by investing in subprime mortgages, bailing them out will just en courage them to do more of the same the next time.  

In the meantime, the economy is ready to go into the tank, and the loss of a million homes dumped onto the already anemic housing market should do the trick.  I don't see any likelihood that help is on the way for these million homeowners. 

A proposal from Bush for another tax-cut for the rich and Big Bidness is much more likely.

By Richard E Walrath

Definitions, facts, theories, principles and myths.  At some point, you have to know which is which.

Do you know what a theory is?  There's a popular misconception of what a theory is. A theory is not just an idea about something. A theory is based on empirical observations which have been tested over time. 

Lost Prophets: An Insider's History of the Modern Economists (1994) by Alfred L. Malabre, p. 220 quotes John Maynard Keynes as saying "When the facts change, I change my mind. What do you do, sir?".  The comment was apparently given in reply to criticism aimed at Keynes for changing his monetary policy position during the Great Depression.

A theory is the best explanation of the facts that exist at that time. 

When It's no longer even a theory it's consigned to the dustbin of useless ideas.  It didn't work.

By Richard E Walrath

People are in a very sour frame of mind with Bush, the wars,  and the last six years in general. 

The rich were happy because of their tax cuts and the stock market, but that's turned sour, too, on top of the housing market debacle, on top of the huge national debt on top of the trade deficit on top of--it just goes on and on.

Sen. Chris Dodd (D-CT) was on TV Tuesday, after he met with Secretary of the Treasury Henry Paulson, and Federal Reserve Chairman Ben Bernanke describing what he thinks needs to be done.  Click the following to Watch clip

If you're a subprime home owner, as things stand now, there's almost nothing that is going to save your home unless you come up with the payments that you can't afford.

A Message from the Homeownership Preservation Foundation

"If you feel like you may be in danger of facing foreclosure, the time to call 888-995-HOPE is now - Homeowner's HOPE™, a counseling service provided by the Homeownership Preservation Foundation, can work with you to find a solution. The sooner you call, the sooner you can regain your peace of mind. Remember, you're not alone. Millions of people across the United States have trouble with their mortgage every year. Since 2002, our counselors have provided advice and education to more than 100,000 homeowners." Please visit www.995hope.org for more information.

By Richard E Walrath

David Cay Johnston's August 21, 2007 New York Times article 2005 Incomes, on Average, Still Below 2000 Peak talks about "average" incomes which in 2005 were below 2000 peak.

Average?  That's not the half of it!  As the story goes, Bill Gates can walk into a room, and the "average" income skyrockets.  But that doesn't make anybody in the room so much as even a dime richer.

Jump over to page 8, and you can finally find the statement that "nearly half of Americans reported incomes of less than $30,000, and two-thirds make less than $50,000."

The median household income, which is not mentioned in this article, remains stuck around $44,000 and includes income of those living in same household.

Where did all those infamous Bush tax-cuts go? Incredibly, 28% of the investment tax-cut savings went to just 11,433 of the 134 million taxpayers!  This is the group who made $10 million or more, saving them almost $1.9 million each, says Johnston.

Feeding the horse more oats, doesn't do the sparrows much good.  Trickle down economics just doesn't work, according to Robert S. McIntyre, director of Citizens  for Tax Justice, as quoted by Johnston. 

By Richard E Walrath and Patricia L Johnson

New Residential Sales for month of June 2007 were at a seasonally adjusted annual rate of 834,000 [22.3 percent below the June 2006 estimate of 1,073.00] while preliminary estimates of Existing Home Sales for June 2007 indicated sales of 5.75 million, [11.4 percent below the June 2006 seasonally adjusted annual rate of 6.49 million]  July figures will be released in a few days.

Job creation and new homes generally have a positive correlation, as do marriages in the same year.  What we have seen during the Bush years is a relatively low number of jobs created.  NBC's Deputy Political Director, Mark Murray indicates 23 million jobs were created under the Clinton administration while only a net of 5.6 million jobs have been created during the Bush years.

"During the eight years of the Clinton Administration -- which, by the way, raised taxes -- about 23 million jobs were created, which comes out to about 240,000 jobs per month. By comparison, only a net of 5.6 million jobs have been created during the Bush years, which comes out to about 71,000 per month. Even taking away the job losses caused by a recession and the 9/11 terrorist attacks, the Bush years come up short: In the 47 consecutive months of job growth since the fall of 2003, the per-month average has been about 177,000 jobs."

That, along with the over-building of homes, has created the mess we're in now.  The houses aren't going to go away no matter how much money they pump into the economy.

By Patricia L Johnson and Richard E Walrath

Just how bad is it?

• Subprime loans represented 8% of total originations in 2003 but increased to 20 percent in both 2005 and 2006 ^[1]
• Most subprime loans issued were hybrid adjustable rate mortgages (ARMs) – 2/28 and 3/27’s ^[1]
• Reports indicate more than half of all foreclosures at the end of 2006 involved subprime loans ^[1]
• Delinquencies on subprime loans are hitting wealthier areas as well as lower income areas. In the Sacramento CA area, 60 day or more delinquencies on subprime loans hit 14.1% in December 2006 ^[2]
• It is estimated the cost of a foreclosure is $40,000 to $50,000 with some lenders reporting losing as much as 50 cents on the dollar ^[1]
• 60% of all subprime mortgages originating in 2006 were 2/28 and 3/27 ARMs ^[1]

Adjustable Rate Mortgages are just that – they’re mortgages that have adjustable rates. It appears both buyers and lenders fell into the ARM trap – buyers by not fully understanding the requirements of their loans, and lenders by not completing sufficient risk assessments on potential buyers. Lenders must ensure their borrower can pay both the current mortgage and the future mortgage payment on ARMs.

There are several key items that must be understood by borrowers purchasing homes with ARMs ^[3]

• Some ARMs have lower interest rates at the beginning of the loan – hence the name 2/28 or 3/27. For the first two years in a 2/28 ARM your rates are lower, or for the first three years in a 3/27 ARM.
• Some ARMs have a ‘balloon payment’ – You may have a 30-year loan and for the first 10 years your payment remains the same, but at the end of 10 years a ‘balloon’ or full payment of the balance outstanding is due. Your option is to refinance and if you’re unable to refinance then you must sell.
• Some ARMs have increased interest due to reduced documentation. Full documentation loans require you to supply proof of income, assets and liabilities to the lender and generally have lower interest rates.
• Some ARMs carry a large prepayment penalty if you sell your house or refinance within the first few years of the loan.
• Some ARMs do not incorporate taxes and insurance into their payments and the buyer must come up with a lump sum payment to cover these expenses.

The following sample chart indicates the difference in payment requirements on a $200,000.00 loan at a fixed 30-year rate of 7.5% compared to a $200,000.00 “2/28” ARM at 7% for 2 years then adjusting to a variable maximum rate of 10% - in year 3, an 11.5% maximum rate year 4, and a 13.0% variable maximum rate in years 5-30. The sample indicates no rate change in years 3 & 4 and a 2% rate increase in year 5. The sample includes $200.00 per month for taxes and insurance. ^[3]

Click for larger version of chart http://www.articlesandanswers.com/ARMCHART.htm

While the fixed mortgage rate remains constant at $1,598.00 per month, the ARM mortgage increases $839.00 per month, from $1,531.00 in years 1 and 2, to $2,370.00 in year 5.

Wall Street Journal online has an excellent interactive map indicating the areas of the country that have been hit by the worst subprime delinquencies.

Some newspapers lumped families who have been caught in the subprime mortgage crisis with speculators who purchased houses for flipping purposes. Somehow we just don’t have the same amount of sympathy for the speculators as we do for the families that are going to lose their homes.

If all those subprime mortgages were still held by the banks that granted them, they wouldn’t have become the problem we have today.

But, they were rolled up, sliced and diced to serve as securities for further issuance of debt. When it all starts to unravel, we have the credit crunch that Bernanke is trying to alleviate with the cut in the discount rate.

This wasn’t the rate cut everyone was looking for, but there will be a cut in the Fed fund rate in the very near future. In the meantime, the cut in the discount rate – the discount rate window – will help, but will it be enough?

Sources: [1] John C Dugan, OCC, April 2007 [2] WSJ Online – Subprime Mortgages [3] Federal Reserve

By Richard E. Walrath

Yes, that is right--two in the state of MO. The only state out of 50 that has not one but two Federal Reserve Banks.

Back in 1913, Missouri was considered to be a really up and coming state. It was in the heart of the country with agricultural and business industries, large cities, growing population, and the wide Mississippi all in its favor.

As near as I can tell, they couldn't decide which city to pick--Kansas City or St. Louis. So they did the only logical thing--they picked both.

But, that's not what happened. The Federal Reserve Act left the actual districting to the Reserve Bank Organization Committee, consisting of the Secretary of the Treasury, William McAdoo, Secretary of Agriculture, David F. Houston, and Comptroller of the Currency, John Skelton Williams.

The three left on a trip that took them to 18 cities for interviews resulting in 5,000 pages of testimony on preferred location of district cities and boundaries.

In the meanwhile, 7,471 ballots were sent out by the Treasury Department to national chartered banks in an effort to determine their preferences. The ballots allowed for first, second and third choice.

When the dust settled, the testimony reviewed and the ballots counted, Missouri ended up with two Federal Reserve Banks.  Kansas City, MO in District 10 and St. Louis, MO in District 8.

Source:  Federal Reserve

By Richard E Walrath

I was reading an article in the Columbus Dispatch today about the "middle-income" buyer earning $20,000 to $50,000. 

It's this kind of sloppy, fuzzy kind of thinking or lack of it that we find every day in the newspapers that are supposed to inform people. 

No way is $20,000 a year "middle-income" and no way is an income of $50,000 comparable to $20,000 except to say, it's two and a half times as much.

By Patricia L Johnson

Click on the following link to read a primer on the Federal Reserve [Banking] System of the United States of America.

http://www.ArticlesandAnswers.com/The%20Big%20Pig.htm

By Richard E Walrath

The two things that are obvious to me, but not to Dan Gross of Newsweek are:

One, a foreign executive almost certainly speaks at least another language as well as English.  Big companies are doing more and more business abroad.

Two, you may end up being president if you have an MBA, especially if it's from Harvard. 

But after seeing what the first and only MBA president has done, it may be that companies are deciding not to hire any more MBA's.

Tough rap for the B-Schools.

By Richard E Walrath

Republican Representative Ray LaHood's (IL) July 27th announcement he was retiring, after seven terms, was the first but not the last.

Since that date Ohio Representative Deborah Pryce announced  she would not seek re-election after eight terms in office.  That will make a lot of people happy.  The Democrats were really gearing up for next year to beat Debbie Pryce.  Pryce came within a 1055 votes of losing hers in 2006 to Mary Jo Kilroy.  Democrats have a very good chance of picking up this seat in 2008.

Former House Speaker, Illinois Republican Representative J. Dennis Hastert's announcement he would not seek re-election in 2008 opens a second Republican-held House seat for the State of Illinois.

Mississippi Republican Representative Charles W. "Chip" Pickering Jr. announced he will not seek re-election.  Lt. Gov. Amy Tuck (R) was a possibility for this seat, but a statement from her office indicates she will not be a candidate.  Pickering's seat will probably stay in the hands of the Republicans.  Mississippi is about as red and red-neck as it gets. 

By Richard E Walrath

What a difference 20 years makes... 

In 1982 there were 312,000 bankruptcy fillings - with 8% due to medical costs.

In 2001 there were 1.458 million bankruptcy fillings with 46.2% due to medical costs.

75.7% of those that sought bankruptcy for medical reasons had health insurance.

http://www.consumerwatchdog.org/healthcare/medicalbankruptcy/

Most people today aren't as well off as they were in 1981, at the same corresponding ages.

Wages in the last twenty years have not increased as much as health care costs.  In the last six years, it's been really bad.

And I'm afraid that it's now about to get worse.  More and more money has been moving toward the top.  That's going to stop, but that won't help those in the middle and on the bottom.

By Richard E Walrath

The US subprime mortgage problem has spread all over the world.  If things don't start to get better, they're going to get worse--much worse.  There is no recession now, but it won't take long to have one. 

That explains why the Federal Reserve approved a 1/2 percentage point cut on loans to banks.  The new discount rate will be 5.75, down from 6.25 percent.

By Richard W Walrath

Subprime mortgages seem to be the prime export of the United States.  While the Fed is feeding in a few billions to shore up the credit markets,the European Central Bank is pouring in dozens and dozens and dozens of billions.

By Richard E Walrath

I think it's like musical chairs--when the music stops, you have to find a chair, or you're out of the game.  Greenspan found a chair for eighteen years and then retired from the Fed.  To change the game, they never laid a glove on him.

Now those low interest rates are coming back to haunt not him but the next guy in the chair.  The music has turned kind of sour of late, and the Dow is down again today--something like a 167 points as I write this.