If America enters a recession as more and more are beginning to predict, there could be a very large and potentially devastating problem that I have yet to see addressed. That problem is the profound rise of the "independent contractor" that has taken place - particularly since the financial crisis.
One of the primary reasons for a working individual to be termed an "independent contractor" is so the employer involved can avoid paying normal employee expenses such as unemployment compensation and workers compensation taxes on them. Just because an employer classifies a worker as an independent contractor does not mean they are one. There are various tests that must be met for this to be the case. One of which is whether the employer exercises direction and control over the person. Basically, if an employer tells a worker what to do, how to do it, when to do it, and provides any equipment to do it - they are in control of the person's activities.
So why does this pose a large and potentially devastating problem? Well, if a large number of supposed "independent contractors" were to lose their jobs due to a recession, they would not be entitled to unemployment insurance. This due to their improper status as independent contractors (the equivalent of being self employed).
Historically, economic recessions have been softened by laid off individuals receiving unemployment insurance to somewhat offset the lost wages. But to be eligible, the worker must have "wage credits" within the UI system on which to base a UI claim. These wage credits are the result of an employer paying a quarterly UI tax on his employees. When workers are misclassified as independent contractors these benefits are not available to them. As a result, one of the most important programs to help households cope and to assist the economy through maintaining purchasing power is lost. The magnitude of this issue will only be known as a recession unfolds.
For some insight on this problem, just consider the case of FedEx ground and Home Delivery drivers. FedEx considers them to be independent contractors despite meeting almost all the "direction and control" tests to clearly establish them to be employees. There have been numerous jurisdictional decisions where authoritative bodies have declared these drivers as employees of the company. But FedEx has somehow been able to maintain this policy. It is actually a substantial aspect of their business model. So numerous case-by-case rulings have found these drivers to be entitled to the same benefits as any other employee, yet FedEx continues this policy company-wide. Imagine being a laid off FedEx ground driver, filing a claim for unemployment insurance, being denied due to lack of any "wage credits", and then having to wait for months to have the denial overturned to be awarded the benefits.
Again, it's unknown how many Americans may be impacted by this scenario in the event of a recession. But it would have an adverse impact on affected households, the local businesses who depend on their spending habits as customers, and at the national level. Not to mention the bureaucratic nightmare involved to properly determine entitlement.
Hopefully the magnitude of this problem won't be severe. But take a minute to consider a couple of things: How many people do you know who are classified as independent contractors in a multitude of various industries? If you were an employer, how tempted would you be to minimize costs by terming someone as an independent contractor to save substantial sums and paperwork headaches required for "regular employees"?
Time will tell. Don't let anyone tell you nobody ever recognized or publicized this potentially devastating issue. I tried to.
- Birney K. Brown
Friday, December 21, 2018
Wednesday, October 31, 2018
Mid Terms - What the Coverage Might Reveal About Those Who Cover It
November 6, 2018 will be a very interesting day. I don't know how it will turn out, but I'm sure of one thing. If the democrats gain any significant number of congressional seats, it will be touted as a widespread repudiation of Donald Trump and republican values. What will be overlooked by these media outlets is the fact that it is very far from unusual for the midterm elections during an administration's first term to result in seat losses. Normally it is just a matter of degree.
In the 2010 midterm elections during Barack Obama's first term, the democrats lost 63 seats in the House of Representatives returning the majority to the republicans. The republicans gained six Senate seats, but the democrats retained their majority.
The vast number of seat changes in the House of Represntatives was the largest since 1948. Also the largest midterm election change since 1938. Only one-third of Senators were up for re-election so a 6 seat loss is not completely insubstantial.
The point is, one should remember these figures when digesting the news coverage of the forthcoming results. The Obama administration's 2010 seat losses were truly monumental and historical. Maybe next Tuesday's results will be comparable, maybe not. But we should make sure that the results are properly compared with the 2010 midterms, and with previous first term midterms in general. Because it would be far from shocking to see the mainstream media portray the results in a manner which vigorously advances their transparent agenda. While at the same time failing to utilize appropriate perspective based on the past. The balanced perspective which is vital in the presenting of accurate news to voters and all Americans.
Hey, if the results do match Obama's losses or sets a new standard, then by all means vigorously report what did take place and get the discourse going because it's gonna greatly elevate the importance of the 2020 general election.
- Birney K. Brown
In the 2010 midterm elections during Barack Obama's first term, the democrats lost 63 seats in the House of Representatives returning the majority to the republicans. The republicans gained six Senate seats, but the democrats retained their majority.
The vast number of seat changes in the House of Represntatives was the largest since 1948. Also the largest midterm election change since 1938. Only one-third of Senators were up for re-election so a 6 seat loss is not completely insubstantial.
The point is, one should remember these figures when digesting the news coverage of the forthcoming results. The Obama administration's 2010 seat losses were truly monumental and historical. Maybe next Tuesday's results will be comparable, maybe not. But we should make sure that the results are properly compared with the 2010 midterms, and with previous first term midterms in general. Because it would be far from shocking to see the mainstream media portray the results in a manner which vigorously advances their transparent agenda. While at the same time failing to utilize appropriate perspective based on the past. The balanced perspective which is vital in the presenting of accurate news to voters and all Americans.
Hey, if the results do match Obama's losses or sets a new standard, then by all means vigorously report what did take place and get the discourse going because it's gonna greatly elevate the importance of the 2020 general election.
- Birney K. Brown
Tuesday, September 25, 2018
MAPS DON'T LIE, BUT GOVERNMENTS DO
Sometimes you have to wonder if typical Americans ever look at maps. Because so often when we are told something by our government or read about it in the mainstream press, we simply conclude that the information was factually presented to us. But familiarity with a map of the Middle East, for example, might get a person questioning things a little bit. It could trigger the utilization of a little common sense based on geography and the precise location of certain countries relative to others. Common sense is one of the great weapons of the citizenry. It harkens back to the classic: "who are you gonna believe, me or your lying eyes".
Use of maps gives a background from which we can formulate our own, singular reasoned judgment concerning events in far away countries. The location of nations in the Middle East and North Africa reveal much about our policies and actions regarding Israel, Egypt, Syria, Iraq, Afghanistan, Saudi Arabia, and others. A truly reflective examination also reveals the very close proximity of some of them to Russia and should spur some thoughts about American activities and how they are explained. To include, quite obviously, how Russia is portrayed.
Try a neat little experiment and see what you come up with. First, take a few minutes to gather your thoughts about events in the last few years in the Middle East and North Africa. Then recall Gen. Wesley Clark's 2007 remarks about our country's plans for Iraq, Libya, Syria, Lebanon, Somalia, Sudan, and Yemen. Then study a map of the full region. Then employ some common sense. I bet what you come up with might well not jibe all that well with what we've been told by our government and mainstream press.
- Birney K. Brown
Sometimes you have to wonder if typical Americans ever look at maps. Because so often when we are told something by our government or read about it in the mainstream press, we simply conclude that the information was factually presented to us. But familiarity with a map of the Middle East, for example, might get a person questioning things a little bit. It could trigger the utilization of a little common sense based on geography and the precise location of certain countries relative to others. Common sense is one of the great weapons of the citizenry. It harkens back to the classic: "who are you gonna believe, me or your lying eyes".
Use of maps gives a background from which we can formulate our own, singular reasoned judgment concerning events in far away countries. The location of nations in the Middle East and North Africa reveal much about our policies and actions regarding Israel, Egypt, Syria, Iraq, Afghanistan, Saudi Arabia, and others. A truly reflective examination also reveals the very close proximity of some of them to Russia and should spur some thoughts about American activities and how they are explained. To include, quite obviously, how Russia is portrayed.
Try a neat little experiment and see what you come up with. First, take a few minutes to gather your thoughts about events in the last few years in the Middle East and North Africa. Then recall Gen. Wesley Clark's 2007 remarks about our country's plans for Iraq, Libya, Syria, Lebanon, Somalia, Sudan, and Yemen. Then study a map of the full region. Then employ some common sense. I bet what you come up with might well not jibe all that well with what we've been told by our government and mainstream press.
- Birney K. Brown
Tuesday, September 18, 2018
RUMINATIONS ON THE FINANCIAL CRISIS TEN YEARS LATER
In one of the greatest examples of the financial industry's control over governmental functions, I remain awestruck by the scheme Wall Street was able to pull off during the beginning of the Obama administration (and actually throughout his eight years).
The Democrats had control of both the House and Senate from January of 2009 until the mid term results in November of 2010 when they lost the House. This was the time when the Obama administration Department of Justice under Eric Holder should have begun aggressively pursuing criminal charges against Wall Street executives. Everyone in Washington, D.C. knew there was pervasive fraud throughout the financial industry. They knew that unquenchable greed driven by Wall Street's engine had infiltrated just about every entity whose goals had anything to do with money. They knew that Main Street was getting unmercifully crushed and who was responsible for it.
So what did Wall Street do in such an environment to protect itself? Well, they somehow cajoled the Obama administration into focusing all its attention on the Affordable Healthcare Act. When they realized how important the passing of Obamacare was to the administration, Wall Street unleashed all its power handlers and other minions to make sure that Obamacare became issue #1 garnering all the media attention and legislative coverage possible. And to keep it in the headlines above all else to include dutifully covering all its endless controversies. ( No wonder the Occupy Wall Street movement was so short lived - ensuring that the ACA remained the foremost issue on everyone's minds efficiently killed off any impetus for financial change).
The Obama administration was played like a fiddle until the mid terms of 2010 when House democrats were unseated everywhere you looked. And so much of the reason for this legislative conversion was the complete and utter failure of Obama to hold Wall Street accountable for its actions. It gave birth to the Tea Party and ultimately the Trump phenomenon. It also coincides with when the democratic party subtly began to lose touch with many of the issues truly important to the typical voter.
I find it ironic and naive that so many defend Mr. Obama by saying stuff like "Congress and the Republicans blocked so much that he tried to do". Well - why the heck did he not do anything whatsoever about the financial criminals when he was in control of Congress for two full years? As earlier stated, it's because he was completely "gamed" by Wall Street who recognized and took full advantage of his obsession with healthcare. They seized upon this myopic obsession in ways only they could to ensure that Obama left the handling and resolution of the financial crisis in the hands of those who had actually created it. Namely Ben Bernanke, the NY Fed, and federal agencies like the Treasury filled to the brim with Wall Street veterans. Such people are not prone to implementing any substantive changes not protective of Wall Street or that would not serve the long term interests of the financial industry.
For those like myself who believe that Wall Street does have a vice-like grip on government, the pathetic response to out-and-out obvious fraud, deceit, theft, dishonesty, and wholesale criminality on the part of white collar banking executives at the highest levels is mind bending. But I also believe it was orchestrated. Politicians tend to turn over financial or heady economic matters to others as they are believed to be very complicated and therefore in need of great expertise. The type of expertise which might lead a healthcare agenda-driven president to perhaps be convinced to pick an Attorney General who has made a career out of litigation in the financial arena. (actually by defending white collar financial criminals as a partner in Wall Street's "first call" firm). This outfit, Covington and Burling - even held his corner office open for his impending return after he apparently felt he had accomplished his "goals" in public service. Mr. Holder was then able to just settle back in. Leaving behind a legacy of puny administrative fines relative to the humongous bank gains through the conduct involved, the cementing of a realization that the continuation of the behavior is therefore profitable, and the standard use of the estimable "without admitting or denying guilt" settlement language.
To top this infuriating rumination off, these same above parties were able to successfully direct the media and our leaders to pronounce that returning the banking system to health was vital for the health of Main Street. Now there's some true "healthcare" concern for you.
- Birney K. Brown
In one of the greatest examples of the financial industry's control over governmental functions, I remain awestruck by the scheme Wall Street was able to pull off during the beginning of the Obama administration (and actually throughout his eight years).
The Democrats had control of both the House and Senate from January of 2009 until the mid term results in November of 2010 when they lost the House. This was the time when the Obama administration Department of Justice under Eric Holder should have begun aggressively pursuing criminal charges against Wall Street executives. Everyone in Washington, D.C. knew there was pervasive fraud throughout the financial industry. They knew that unquenchable greed driven by Wall Street's engine had infiltrated just about every entity whose goals had anything to do with money. They knew that Main Street was getting unmercifully crushed and who was responsible for it.
So what did Wall Street do in such an environment to protect itself? Well, they somehow cajoled the Obama administration into focusing all its attention on the Affordable Healthcare Act. When they realized how important the passing of Obamacare was to the administration, Wall Street unleashed all its power handlers and other minions to make sure that Obamacare became issue #1 garnering all the media attention and legislative coverage possible. And to keep it in the headlines above all else to include dutifully covering all its endless controversies. ( No wonder the Occupy Wall Street movement was so short lived - ensuring that the ACA remained the foremost issue on everyone's minds efficiently killed off any impetus for financial change).
The Obama administration was played like a fiddle until the mid terms of 2010 when House democrats were unseated everywhere you looked. And so much of the reason for this legislative conversion was the complete and utter failure of Obama to hold Wall Street accountable for its actions. It gave birth to the Tea Party and ultimately the Trump phenomenon. It also coincides with when the democratic party subtly began to lose touch with many of the issues truly important to the typical voter.
I find it ironic and naive that so many defend Mr. Obama by saying stuff like "Congress and the Republicans blocked so much that he tried to do". Well - why the heck did he not do anything whatsoever about the financial criminals when he was in control of Congress for two full years? As earlier stated, it's because he was completely "gamed" by Wall Street who recognized and took full advantage of his obsession with healthcare. They seized upon this myopic obsession in ways only they could to ensure that Obama left the handling and resolution of the financial crisis in the hands of those who had actually created it. Namely Ben Bernanke, the NY Fed, and federal agencies like the Treasury filled to the brim with Wall Street veterans. Such people are not prone to implementing any substantive changes not protective of Wall Street or that would not serve the long term interests of the financial industry.
For those like myself who believe that Wall Street does have a vice-like grip on government, the pathetic response to out-and-out obvious fraud, deceit, theft, dishonesty, and wholesale criminality on the part of white collar banking executives at the highest levels is mind bending. But I also believe it was orchestrated. Politicians tend to turn over financial or heady economic matters to others as they are believed to be very complicated and therefore in need of great expertise. The type of expertise which might lead a healthcare agenda-driven president to perhaps be convinced to pick an Attorney General who has made a career out of litigation in the financial arena. (actually by defending white collar financial criminals as a partner in Wall Street's "first call" firm). This outfit, Covington and Burling - even held his corner office open for his impending return after he apparently felt he had accomplished his "goals" in public service. Mr. Holder was then able to just settle back in. Leaving behind a legacy of puny administrative fines relative to the humongous bank gains through the conduct involved, the cementing of a realization that the continuation of the behavior is therefore profitable, and the standard use of the estimable "without admitting or denying guilt" settlement language.
To top this infuriating rumination off, these same above parties were able to successfully direct the media and our leaders to pronounce that returning the banking system to health was vital for the health of Main Street. Now there's some true "healthcare" concern for you.
- Birney K. Brown
Tuesday, March 20, 2018
Are We Getting Ready to (PARTY) Again Like it's 2008?
The year 2018 is the tenth anniversary of the Financial Crisis. The "celebration" of the collapse of Bear Stearns occurred last week. Many more such landmarks will coming up throughout the year.
One of the most disheartening things about the Great Recession is that the typical American did so little to try to understand the causes. This lack of interest or exploration is mystifying and severely disappointing. Particularly when so many of the factors leading to the crisis still exist today. More and more provisions of the Dodd-Frank legislation are being dismantled amidst regenerated efforts at deregulation. Just as nothing was learned from the excessive leverage of exotic trading strategies that caused the Long Term Capital Management implosion in 1998, we are now in the process of repeating the same grave errors that occurred in the early part of the century. All of this in the unnaturally low interest rate environment that persists despite the profound damage this disastrous Federal Reserve policy brought about in the first place.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
So I'm gonna clear off my blogger cobwebs and try my best to do something about all this. While always trying to keep things as basic and readily understood as possible. Because the typical American's lack of knowledge about basic economics and its interaction with the world of finance does not stand alone. Congress, the Trump administration, financial regulators, and of course - the Federal Reserve - are all in the process of forgetting recent lessons while being fitted for their brand new dunce caps.
p.s. - Note that the LTCM implosion happened ten years before the Financial Crisis, which happened ten years ago. Recognize any pattern?
One of the most disheartening things about the Great Recession is that the typical American did so little to try to understand the causes. This lack of interest or exploration is mystifying and severely disappointing. Particularly when so many of the factors leading to the crisis still exist today. More and more provisions of the Dodd-Frank legislation are being dismantled amidst regenerated efforts at deregulation. Just as nothing was learned from the excessive leverage of exotic trading strategies that caused the Long Term Capital Management implosion in 1998, we are now in the process of repeating the same grave errors that occurred in the early part of the century. All of this in the unnaturally low interest rate environment that persists despite the profound damage this disastrous Federal Reserve policy brought about in the first place.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
So I'm gonna clear off my blogger cobwebs and try my best to do something about all this. While always trying to keep things as basic and readily understood as possible. Because the typical American's lack of knowledge about basic economics and its interaction with the world of finance does not stand alone. Congress, the Trump administration, financial regulators, and of course - the Federal Reserve - are all in the process of forgetting recent lessons while being fitted for their brand new dunce caps.
p.s. - Note that the LTCM implosion happened ten years before the Financial Crisis, which happened ten years ago. Recognize any pattern?
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