“Gov. Perry’s decision to sponsor a ‘Christians-only’ prayer rally is bad enough. That he turned to an array of intolerant religious extremists to put it on for him is even worse,” Americans United for Separation of Church and State director Barry Lynn said in a statement. “This event unites us in our conviction that government should have no favorite theology and that it must always strive to ensure that all citizens — Christians, Jews, Muslims, Hindus, Buddhists, atheists and others — are full and equal partners in the public square.”

Called “Faith, Family and Freedom,” the Aug. 5 event is scheduled to feature religious and non-religious leaders from the Houston community and is intended to celebrate “diversity, inclusion, and unity” — qualities the civil liberties and watchdog groups say are lacking from the prayer rally.

“Government promotion of an exclusive Christian event implies that our government views certain types of people as more caring about the well-being of our country than others, and also implies that our government views Christianity as the only way to approach the challenges that our society faces,” said Terri Burke ACLU of Texas’ executive director. “We don’t see it that way, and thought somebody ought to host an event that welcomes all faiths and traditions.”

The ACLU recently filed an open records request to ensure no taxpayer funds have gone toward the Perry-sponsored event, the Texas Independent reported. That information is expected to be released by Aug. 3.

A growing coalition of LGBT-rights and faith-based groups have also planned a counter protest just north of Reliant Stadium, the site of the all-day prayer event, on the day of the rally.

Groups including GetEQUAL, a Texas-wide, direct-action LGBT civil rights organization,American Atheists and the Houston Clergy Council plan to conduct a peaceful demonstration opposing the event’s possible church/state separation violations, religious exclusivity and its affiliation with the American Family Association, a designated anti-gay hate group. More than 800 people have signed up to attend on the event’s Facebook page, up from 300 in mid-June.

Perry spokesperson Lucy Nashed has countered accusations of religious exclusivity,saying the event is Christian-based, but that the governor has invited, “all faiths to pray however they see fit.”

In the giddy, post-electoral haze in 2008, many people hoped and believed that the election of President Obama would herald a new, “post-racial” America. But a look at some recent economic statistics tells a different story.

While overall employment in March stood at 9.7 percent, some 16.5 percent of African-Americans were unemployed. A staggering 41.1 percent of African-Americans between 16 and 19 years of age are unemployed, based on the March numbers, while 19 percent of adult African-American men and 12.4 percent of adult African-American women are facing unemployment. With the exception of the unemployment rate for teenagers, those seasonally adjusted numbers were up over February statistics, even as white unemployment stayed the same.

[Economy1] The numbers weren’t much better among Hispanics.

Latinos face a 12.6 percent unemployment rate overall, while Latino teenagers face a non-seasonally adjusted 30.1 unemployment rate and Latino men and women are unemployed at rates of 12.8 and 12 percent, respectively

Meanwhile, seasonally adjusted white unemployment stood at 8.8 percent (and non-seasonally adjusted unemployment declined from 9.7 to 9.3 percent). While unemployment in the general population — and the white population — seemingly peaked last October, it didn’t peak for African-Americans or Latinos until January 2010 and has already nudged back up. Latino women, in fact, continue to see an expansion in their rates of unemployment.

But the Obama Administration has done little, so far, to target higher rates of unemployment in communities of color as a result of the recession — let alone the existing conditions that lead to ongoing disproportionately high unemployment rates, specifically within African-American communities.

The jobs bill passed by the Senate doesn’t contain even the money for youth employment programs — like the ones mentioned approvingly by the president in 2009 — passed by the House, and it doesn’t contain provisions pushed by African-American lawmakers to make sure that at least 10 percent of the budget for each section of the bill goes to communities where 20 percent of the population is low-income. It has been criticized by African-American lawmakers like Rep. Elijiah Cummings (D-Md.), a member of the Congressional Black Caucus, for not focusing on the unique problems facing the African-American community and, in particular, hard-hit urban communities facing chronic unemployment. Cummings spokesman Paul Kincaid said, “The congressman and the CBC are really focused on the need for expanding job training as a way to combat these issues.”

Dean Baker, co-director of the Center for Economic Policy and Research, agrees with Cummings that the president hasn’t gone far enough, saying “[The administration has] been way too meek on it. One thing in particular they could have pushed employment programs targeted to areas of high unemployment. They could focus on areas where unemployment rates are above 20 percent or something, and get money for job creation to areas like Detroit, which employment is just falling through the floor.” If the administration focused on communities disproportionately affected by unemployment, even if it didn’t specifically target African-American communities, its efforts would have a disproportional impact on those communities suffering most from unemployment, including African-Americans, he said.

Baker noted that such statistics have, unfortunately, been typical for years. “African-Americans suffer a disproportionate impact to their employment at every downturn, in part because they have a disproportionate rate of unemployment to start with,” he said. Unemployment in the African-American community was in the double digits prior to the economic downturn and continued, as it always does, to climb up to disproportionately high rates; no one expects it to achieve parity with white unemployment rates as part of the stimulus or jobs bills, let alone because of the recovery.

When asked in 2009 about the African-American unemployment rate — which economists expected could hit 20 percent by the end of the year — and why he hadn’t yet targeted programs at the African-American community, Obama said: “We know that the African-American unemployment rate, the Latino unemployment rate are consistently higher than the national average. And so, if the economy as a whole is doing poorly, the African-American community is going to be doing poorly, and they’re going to be hit harder. The best thing that I can do for the African-American community, the Latino community, the Asian community, whatever community is to get the economy as a whole moving.” The president then went onto the describe some existing programs that target urban teenagers with job skills training, and how the administration might duplicate those programs eventually, in a roundabout way of answering what the administration might do if African-American employment rates did not improve. At the time, reports indicated that if unemployment in the African-American community continued to get worse, the administration would look at more targeted programs.

The National Urban League, in a report issued March 24, suggested a similar program: $150 million in grants to cities, states, non-profits and universities based on local unemployment rates to create three million jobs in the hardest-hit communities. Urban League president and CEO Marc Morial said, “The first thing that needs to be done is direct job creation to put people to work, because fixing structural problems can’t happen while so many people are out of work. What we did in the 30s, what we did in the 70s, with the government hiring people directly, is a good place to start. Congressman Miller’s bill, which would give money to cities to hire people, with 25 percent allocated to community-based organizations to help put people to work.” He also suggested that one way for the president to resolve the criticisms that funding infrastructure projects disproportionately puts white people back to work is to invest heavily in construction training programs in urban areas, where those skills are often in short supply and unemployment is highest.

Economics professor and author Boyce Watkins of Syracuse University thinks a jobs program needs to go much further than that: “Put in place $80-100 billion to a direct effort to create jobs in urban centers around the country, with a disproportionate amount of resources targeted at cities with the highest unemployment. Then you can have a dramatic impact on unemployment very quickly. It would be more effective than giving tax credits to small businesses to hire people,” Watkins said in an interview. The president, he added, “doesn’t have to have a black agenda, he can simply have a strong urban agenda,” but he’s concerned that, with Larry Summers and Tim Geithner at the helm of economic policy, the president won’t hear much about an economic agenda that addresses poverty issues, let alone economic issues of concern to African-Americans or other people of color, because, he says, neither man has any background or apparent intellectual interest in those areas. “If people’s hearts aren’t in the right place, then their intellects won’t be,” he said.

Like the Joint Education Committee report, Morial and Watkins also highlighted the need for significant investments in job training and adult education over the coming years to address the larger structural problems in the African-American community and resolve the apparent mismatch between skills and available jobs. Morial said, “People with long term or structural unemployment generally have high school education or less, and we need a significant, sustained investment in job training, community-based job training and adult education programs to even begin to think about changing the structural problems.” But at this stage, neither a targeted jobs program or a significant investment in targeted job training appears to be on the president’s agenda.

Perhaps alternate employers without salary caps — because their companies didn’t require a massive government bailout after failing to manage risk, understand complex derivatives and stay afloat — didn’t think the best hiring bets were a bunch of whiny guys who tried to bail on their failing companies after determining that failure might mean lower salaries? That’s just a layperson’s guess, though.

It’s not as though Feinberg is taking it easy on them, either.

Pay for top earners at [the 5 companies that received multiple bail-outs and haven't paid them back], on average, is expected to fall by 11 percent from 2009, to $1.62 million, according to people briefed on the situation. Compensation is down nearly 77 percent from 2008. And this year, more than 70 percent of all approved compensation is expected to be given in the form of stock instead of cash.

Ouch. Only an average salary of $1.62 million? That might be going a little easy on them, it’s true. Unemployment — in New York State at least — pays $405 a week, though, regardless of how much you earned before your company went under.

Feinberg also doesn’t take kindly to whiners.

Officials at some of the companies had fiercely insisted that they needed to pay hefty salaries to retain senior executives and allow them to maintain a comfortable living standard, according to people close to the talks. Mr. Feinberg countered by lowering cash payments and awarding more stock. His rulings will take effect immediately, with amounts retroactively adjusted for any money paid in the first few months of 2010.

That will teach anyone to complain, I guess. Michael Carpenter, the new CEO of GMAC, was offered a $9.5 million salary, rejected by Feinberg — and, in response to arguments from GMAC that they needed to pay him more, Feinberg allowed them to give him $8 million worth of stock that he can’t sell for three years … and not a penny of salary.

Mitt Romney (UPPA/ZUMApress.com)

Mitt Romney’s just-published book, “No Apology: The Case For American Greatness,” is a bid to bolster the former Massachusetts governor’s nonexistent national-security and foreign policy portfolio ahead of a possible 2012 presidential run. But a glance through the remarkable conflation of conservative shibboleths, paranoid global fantasies and deterministic myopia in “No Apology” makes it difficult to avoid the conclusion that the perennial GOP candidate might have been better off saying nothing at all.

Romney’s central contention is that there are four “strategies” for global power: the United States’ blend of benevolent, market-based hegemony; the Chinese model of political autocracy and unrestrained industry; Russia’s energy-based path to resurgence; and the “violent jihadists,” an agglutination of scary Muslims. Trouble in paradise, according to Romney, comes from President Obama’s “presupposition” that “America is in a state of inevitable decline.” As a result, Romney must warn the nation to continue to lead the world, lest one or more of these competitors overtake America. “[T]here can be no rational denial of the reality that America is a decidedly good nation,” writes Romney, or perhaps a third grader. “Therefore, it is good for America to be strong.”

[Security1]So many things are wrong with Romney’s view of an imperiled America that it is difficult to know where to begin. First, the idea that the U.S. is locked in a struggle for global supremacy with “violent jihadists” overlooks the exponential differences in economic resources, military strength, and global appeal between America and an increasingly imperiled band of Waziristan-based acolytes of Osama bin Laden. Al-Qaeda can attack us; it cannot displace the U.S. as a global leader. It manufactures nothing, trades with no one, and has absolutely nothing to offer anyone except like-minded conspiratorial murderers. In order to disguise these glaring asymmetries, Romney has to use an empty term — “the jihadists” — which he cannot rigorously define and with which he means to absorb the vastly different aims and ambitions of rival terrorist groups and separate nations like Iran.

“Violent jihadist groups come in many stripes across a spectrum,” Romney writes, “from Hamas to Hezbollah, from the Muslim Brotherhood to al-Qaeda.” But al-Qaeda exists because it considered the Muslim Brotherhood in Egypt too accommodating of the Egyptian government; Hamas has literally fought al-Qaeda attempts at penetrating the Gaza Strip; and Sunni al-Qaeda released a videotape just this weekend that derides “Rejectionist Shiite Hezbollah.” There is absolutely nothing that unites these organizations in any programmatic manner except Romney’s ignorance, and the expansion of ignorance is insufficient to topple an American superpower.

The comparison between American and Russian or Chinese global power is less obviously stupid than between that of the “violent jihadists.” But that is not saying much. The amalgamation of Wikipedia-level facts about Chinese economic and military growth and renewed Russian assertiveness “No Apology” provides does little more than demonstrate that the Chinese are modernizing and the Russians again desire a prominent global position. But the U.S.’s military advantage over the Russians and the Chinese is massive, and will remain massive for decades. In 2008 alone, the U.S. spent over $700 billion on its military. China spent $122 billion and Russia spent $70 billion. At one point in the text, Romney is forced to concede that the Council on Foreign Relations wrote that until at least 2030 there is “no evidence to support the notion that China will become a peer military competitor of the United States.” He waves away that inconvenient fact:

On the other hand, Afghanistan fighters were certainly not a peer military with the Soviet Union, yet they defeated the Soviets — not globally of course, but certainly in Afghanistan.

One could conclude from this analogy that the lesson for the U.S., then, is not to invade and occupy China.

There are two salient global facts Romney never considers in his book. The first is that it is actually possible to obtain positive-sum relations with rising powers. The rise of China does not have to equal the decline of the United States. If, as Romney argues — following Washington Post columnist Charles Krauthammer — decline is a choice, so is permanent international competition. The concept of diplomacy is completely foreign to Romney. He dismisses the State Department as “assistant secretaries and… bureaucrats” and proposes designating regional relations to “one individual” who would become a “presidential envoy or the ambassador from CENTCOM or any of the other regional military commands.” Such an individual would “encourage people and politicians to adopt and abide by the principles of liberal democracy,” something that “would be ideal if other allied nations created similar regional positions, and if we coordinated our efforts with theirs.” That’s it for diplomacy, and he doesn’t have an agenda for global development. Why the world will simply do what America says simply because America says it is something Romney never bothers to consider. High school students at model U.N. conferences have proposed less ludicrous ideas.

The second concept Romney ignores is international institutions. He has practically nothing to say about the network of international institutions and regional alliances the U.S. engages with, from the United Nations to the G-20 to NATO to ASEAN to the IMF and World Bank. These institutions, occasionally the object of scorn from the right (the U.N.) and the left (the IMF), are permanent fixtures in international relations — fora for both international competition and cooperation. Romney has nothing to say about them — except for the invocation that NATO nations ought to spend more on defense — which might help explain why he views global power as a zero-sum competition.

That absence could be explained by the typical conservative hostility to anything resembling diplomacy or multilateralism. But there is a more surprising absence in “No Apology”: the Afghanistan war. Romney has absolutely nothing to say about a conflict in which 100,000 U.S. troops are committed, and which he would most likely inherit should he win the presidency in 2012. He proposes expanding the counterinsurgency capabilities of the military, but manages to say absolutely nothing about what they ought to do in Afghanistan, except for the content-free platitude that “we must draw upon the resources of our entire military.”

Romney himself never served, and his unfamiliarity with military issues is evident in “No Apology.” He proposes adding “at least 100,000 soldiers to the army and the marines” (Marines are not soldiers) and spending “at least 4 percent” of GDP on the military without explaining why. Why not 5, 10, 15 percent? Not only does Romney not discuss what to do in the actual conflict America fights, he can’t articulate why his proposals adequately resource the strategies he advocates. Most likely, he has been given a set of position papers from conservative think tanks and allowed a ghostwriter to weave them into something approaching a narrative. (Romney credits the conservative foreign-policy analysts Dan Senor, Pete Wehner, Mitchell Reiss and the Kagan family for some of the ideas that he presents.)

What he also barely articulates is his contempt for President Obama. Somehow Obama’s hypothetical out-year defense budget cuts to 3 percent of GDP — hypothetical because they are projections — leave the nation vulnerable to attack, but ticking that spending up to 4 percent of GDP (it’s at 3.7 percent now) means everything will be copacetic. That might be the most reality-based that Romney’s description of Obama’s approach of foreign affairs actually is. He imagines Obama taking an “American Apology Tour,” a staple talking point on the right to describe Obama’s 2009 trips abroad in which the president showed a conciliatory face to foreign leaders and publics. It is telling that Romney produces not a single quote from Obama deriding America, protecting himself from the inevitable charge of caricaturing Obama by saying the president, “always the skillful politician, will throw in compliments about America here and there.” The dishonesty of that statement is demonstrated by the most cursory glance at Obama’s major foreign speeches, from Prague (“Just as we stood for freedom in the 20th century, we must stand together for the right of people everywhere to live free from fear in the 21st century”) to Cairo (“America holds within her the truth that regardless of race, religion, or station in life, all of us share common aspirations — to live in peace and security; to get an education and to work with dignity; to love our families, our communities, and our God”) to Oslo (“Whatever mistakes we have made, the plain fact is this: The United States of America has helped underwrite global security for more than six decades with the blood of our citizens and the strength of our arms”). Romney is offended by Obama’s U.N. speech that “power is no longer a zero-sum game,” writing, “that by necessity means America does not have the ability to maintain a dominant position in the world.” Any first-year logic student can correct Romney on that.

Romney has little choice but to caricature Obama. The president’s foreign-policy record so far is one of increased relations with Pakistan that have finally yielded Pakistani arrests of Afghan Taliban leaders; a commitment to resourcing and waging the Afghanistan war capably; the effective international isolation of Iran over its nuclear program (thanks in part to improved relations with Romney’s Chinese and Russian bogeymen); and a so-far cautious drawdown of military forces in Iraq. If Romney has a problem with any of this, he does not say — but because he cannot credibly gain purchase with a suspicious Republican Party that repudiated him in the 2008 primaries without bashing Obama, he must attack the version of Obama that exists in his mind. It’s telling that Romney’s actual proposals to expand counterinsurgency efforts in the military, strengthen cybersecurity initiatives and build a more effective missile-defense system are all initiatives that the current administration has pursued. For all of Romney’s imagination, paranoia, ignorance and invective, he has managed to build a foreign-policy doctrine in “No Apology” that, at its most substantive, can be charitably called Obama Lite. If he ultimately runs for president, he may find himself before GOP audiences apologizing for it.

An ambitious plan to update the Carter-era Community Reinvestment Act that supporters hope to see signed into law in 2010 comes amid charges that this legislation was responsible for nothing less than the subprime crisis and the resulting collapse of the residential real estate market.

The plan, sponsored by Rep. Eddie Johnson (D-Tex.), would close some loopholes in the original act that let non-bank financial firms operate with relative impunity. It would levy negative ratings on a much wider array of institutions that practiced predatory or discriminatory lending, and it would require that non-bank entities like mortgage providers and insurance companies comply with all CRA tenets.

[Economy1] Why this piece of legislation is still such a lightning rod more than 30 years after its introduction is something both its supporters and detractors struggle to explain from their respective camps. “The idea that this was just some sort of carrot-stick regulation that didn’t work is a perception that goes very much in hand with a right-wing agenda,” said Jose Garcia, associate director for research and policy at advocacy group Demos. Demos is one of several progressive groups seeking to have the bill, the Community Reinvestment Modernization Act of 2009, made into law.

On the other hand, Mark Calabria, director of financial regulation studies at the Cato Institute, asserts that political pressure drives CRA support. “It fundamentally gets to some very emotional issues. [Supporters] see this as an issue of racism and social justice,” he said. The Cato Institute held a forum in November that was broadly critical of the CRA, asserting that the financial models at its core are faulty.

Federal Reserve chairman Benjamin Bernanke called the CRA a “catalyst” in 2007, although he touched on the trouble already brewing in the subprime mortgage sector as an imperative to revisit the Act in the wake of significant changes in the banking industry since its implementation.

At its heart, the CRA was created to try and legislate out some of the institutional discrimination in the financial services industry. It was conceived in a very different era from today’s world of global banking behemoths. In the wake of the civil rights movement, most banks were still small, often single-branch operations. Many would operate selectively in low-income and minority neighborhoods, accepting the deposits of local residents but only writing home or business loans in more affluent communities.

Regulatory changes in banking plus an agenda embraced by Fannie Mae and Freddie Mac to boost homeownership cracked the mortgage market wide open beginning in the 1990s, and the CRA was initially credited with higher rates of homeownership among low-income and minority Americans. According to Kathleen Day, spokesperson for the Center for Responsible Lending, “The purpose of the CRA is to go into underserved areas and look for credit-worthy borrowers you overlooked because of red-lining,” she said, referring to the bank practice of categorically refusing to lend in certain neighborhoods.

The result of reckless lending practices is by now apparent to everyone, although concerns were swept under the rug in the go-go years of the mid 2000s. CRA supporters say brokers and non-bank mortgage outfits wrote nearly 95 percent of the bad loans, while the Act took the fall when these loans turned out to be unsustainable.

“Nine out of 10 of the people who got bad loans already had homes,” said the Center’s Day. “Six out of the 10 were refinances and three were selling one home and buying another.”

Often, Day adds, the unscrupulous vendors that preyed on subprime mortgage candidates cloaked their malfeasance in the language of the CRA’s mission, a sleight of hand that muddied the waters and assigned undue blame on the regulation when mortgages — and the huge numbers of securities backed by them — began to sour.

Even Lawrence White, a New York University who wants to see the CRA scrapped, says it’s not to blame for the financial meltdown. “The CRA has very little to do with the subprime lending debacle,” he said.

Aside from mortgage lending, the other goal of the CRA is to provide basic banking services to low-income and minority citizens. In these locations, “Pawnshops and the like literally became the banking services,” said John Taylor, president and CEO of the National Community Reinvestment Coalition, the organization spearheading the modernization of the CRA.

“In some communities there are no financial institutions,” asserted Demos’s Jose Garcia. Geographic impediments and language barriers create a two-tier system that leaves low-income Americans, minorities and immigrants without access to the banking and lending services the middle class takes for granted.

If the legislation were better-enforced — something the NCRC’s Taylor believes the modernization bill would facilitate — banks wouldn’t be able to do things like close branches in these communities without repercussions. But preventing closures would just be the beginning.

In a 12-page statement, the NCRC spelled out major features of modernization. Key among them are inclusion of non-bank financial firms under the umbrella of CRA oversight, and a greater emphasis on the neighborhoods in which institutions write loans, not just the locations where their branches or offices are located. This is partially due to the rise of online and branchless financial institutions, but Taylor says the switch will also prevent companies like subprime mortgage-peddlers from operating under the radar.

Advocates also want to see enforcement of the CRA transferred to the not-yet-created Consumer Financial Protection Agency. The CFPA, as its supporters envision it, would consolidate regulatory oversight and enforcement of banking and lending activities in a single agency, rather than the patchwork of regulators some say let ruinous business practices slip through the cracks.

The modernization effort isn’t without roadblocks, though. The current House bill has yet to progress to the Senate, although Taylor says the NCRC’s goal is to have the modernization signed into law sometime this year. The CFPA doesn’t even exist yet, and might never come to fruition. Last week, Senate Banking Committee Chair Christopher Dodd (D-Conn.), the lawmaker who has championed the idea, indicated he may be willing to abandon the idea of a consumer protection agency.

In the end, it’s not clear what is ahead for the CRA. Some, like the Cato Institute’s Mark Calabria, think the need has run its course. “There was a logical raison d’être for the creation of the CRA at the time but that justification is no longer there,” he said. He admits that an outright repeal of the Act is unlikely, though. NYU’s Lawrence White also wants to get rid of the CRA, although he wants to replace it with a cap-and-trade system of credits similar to the protocol used to eliminate acid rain-causing sulfur dioxide in the 1980s.

Progressive and social-justice groups say that the CRA, while not perfect, needs to be improved, not thrown out. “We’re talking about trillions of dollars of private resources that could be available to low- and moderate-income neighborhoods,” said the NCRC’s Taylor. “We believe in banks. If we don’t have them active in these neighborhoods, it’s very unlikely they’re going to prosper. We want banks to see these neighborhoods as an important part of the economic future of this country and of their business plans.”

In the end, it might come down to that. If the notoriously profit-hungry banking industry sees economic potential in lower-income areas, this would go a long way towards keeping the predatory players out of the arena.

Former President George W. Bush (Gamma/Eyedea/ZUMA Press)

A decade’s worth of cuts in federal aid combined with states moving to copy Bush administration tax cuts have led to states filling revenue shortfalls with regressive tax policies that disproportionately affect the poorest Americans. According to “Who Pays?” a report issued in November by the Institute on Taxation & Economic Policy, the poorest 20 percent of Americans pay nearly 11 percent of their income in state and local taxes, the majority of which is in the form of sales and excise taxes. Those in the top 1 percent, by contrast, pay just over 5 percent of their income in state and local taxes, and the majority of that is income tax.

[Economy1] “To the extent that states rely on sales tax, they’re going to be regressive,” said Howard Abrams, professor at Emory University School of Law, pointing out that the most regressive states in the ITEP report depend on sales and excise tax revenues to a great degree. Since poor individuals spend rather than save more — or all — of their income, sales tax as well as excise taxes on goods like gasoline and cigarettes impact them to a greater degree. Their wealthier counterparts, by contrast, tend to save and invest, which means every dollar they make isn’t going towards taxable purchases. A graduated income tax is designed to balance this burden by taxing wealthier occupants at a higher rate, but some states have such low thresholds for their top rates, or their rate spread is in such a narrow range, that any benefit to lower-income residents is lost.

The poorest Americans are also burdened by regressive property taxes, said Philip Harvey, professor at Rutgers School of Law. Two factors contribute to this: One, they may live in less-wealthy municipalities that have to tax at a higher rate to provide services. Secondly, many lower-income individuals rent rather than own property. “Economists generally know property taxes tend to be regressive because rent includes taxes indirectly,” Harvey said. Since lower-income people statistically spend a higher percentage of their income on housing, this translates to yet another higher tax burden.

In theory, federal income tax balances out this disparity to an extent because it relies on a graduated formula, but critics of the status quo say the country’s poorest citizens are still suffering from the effects of the Bush tax cuts. “Unambiguously, federal taxes have become less progressive over the last 10 years,” said Kim Rueben, public finance economist at the Urban Institute-Brookings Institution Tax Policy Center.

“One of the big changes during the Bush administration was a substantial reduction on capital gains and dividends,” said Emory’s Howard Abrams. “The only people that got the benefit were the extraordinarily wealthy.” Not only does this rob federal coffers of funds, but it also sets a precedent for states, several of which followed suit with tax cuts of their own.

States’ tendency to mimic federal actions does have a silver lining in that 23 states and Washington, D.C., offer earned-income tax credits modeled after the federal credit. Matthew Gardner, executive director of the ITEP, said credits like these, especially when they are refundable, go a long way towards leveling the playing field for low-income people. These credits aren’t enough, though. “The credits that were introduced under Bush for the poor families were dwarfed by declining tax rates at the top,” said the Tax Policy Institute’s Rueben.

Bush-era cutbacks on federal monies sent to states are equally harmful to poor residents. “There isn’t a lot of redistribution being done at the state and local level,” said Alan Viard, resident scholar at the American Enterprise Institute. “You expect that and want it to be done at the federal level.” Problems crop up when the federal government scales back this involvement. With less aid coming from Washington, states must rely solely on their own residents for funding, which nearly always leads to an increased reliance on regressive tax policies.

The ITEP’s Gardner says he is hopeful that the recession-prompted emergency aid to states will become the new status quo. If the federal government becomes involved to a greater degree in redistributing the tax dollars it takes in, states would have the breathing room to roll back some of their sales and excise tax increases.

Progressive groups are hopeful that the Obama administration will reverse some of these disparities by allowing provisions that cut taxes for the wealthiest Americans to expire next year and in 2011. While this wouldn’t directly change states’ tax structures, these changes to the federal tax code would create a healthier balance for poor as well as middle-class citizens.

According to a report published by the Tax Policy Center, Obama administration proposals would lower the federal tax rates for all but the wealthiest 20 percent of citizens. The net tax rates for all Americans would be the same under Obama’s plan as under an alternate model that assumes the extension of the provisions implemented by Bush; however, the costs in the former case would be shouldered to a much greater degree by the wealthiest citizens. With a federal program like that in place, the inherently regressive nature of most state and local taxes would be less of a burden on those who have already borne an outsized share of this recession’s pain.

Attorney General Eric Holder (WDCpix)

When Attorney General Eric Holder announced earlier this month that the suspected plotters of the Sept. 11 terrorist attacks would be tried in civilian court, he also promised to seek the death penalty for all of them. But the heated debate that followed over the supposed dangers of trying “the worst of the worst” in a New York federal court has largely eclipsed the question of whether the death penalty is actually the best punishment for convicted terrorists.

[Law1]Some of the men have not only proudly claimed responsibility for the attacks, but also said that they want to be executed and martyred. Setting aside any moral concerns about the ultimate punishment, it’s not clear in this case whether the death penalty would act as a deterrence or an incitement to other potential terrorists. When it comes to jihadists who willingly risk or relinquish their own lives for their cause, is the death penalty really such a good idea?

“It is in the strategic interests of the United States to deny these most heinous Al Qaeda terrorists what they want most: martyrdom,” wrote Ken Gude, associate director of the International Rights and Responsibility Program at the Center for American Progress, in a report released earlier this month. “Al Qaeda will exploit an execution by the U.S. government as a significant propaganda victory, no matter how fair and legitimate the trial,” he added in an article in The Guardian.

Even former Attorney General Michael Mukasey said last year that he hoped that these men would not be executed. Asked by students at the London School of Economics in 2008 whether he thought the Sept. 11 defendants, who were then facing military commission trials, should get the death penalty, he said: “I kind of hope they don’t get it. Because many of them want to be martyrs and it’s kind of like the conversation, you know, between the sadist and the masochist. The masochist says ‘Hit me’ and the sadist says ‘No.’ So I am kind of hoping they don’t get it.”

Other legal experts agree, but for different reasons. “I think the fact that the defendants want to be executed shouldn’t count either way,” said Michael Dorf, a law professor at Cornell University, who advocated against the death penalty for these suspects when they faced military commission trials last year. “However, I do think it is legitimate for the government to worry about the possible counter-productivity of the death penalty here. That is, if the government had concluded that executing [Khalid Shaikh Mohammed], et al were likely to substantially aid Al Qaeda in recruiting, a decision not to seek the death penalty could be based in part on that worry.” According to Dorf, executing the men not only wouldn’t deter other terrorists from committing similar crimes, but could even encourage them.

This debate comes at a difficult time for President Obama and his attorney general. The president has promised to close the Guantanamo Bay detention center by Jan. 22, but faces huge challenges. Those range from where to try the suspected terrorists housed there to where to send those that have been cleared for release but can’t be sent home due to potential persecution or political instability. Republicans, citing the dangers to the United States of trying terrorists on our soil and claiming the terrorists don’t deserve the rights accorded to criminal defendants in federal court, have pushed to try most terror suspects in military commissions. Many Democrats, prominent legal experts and former military leaders, on the other hand, have argued that civilian federal courts are better-equipped to handle such cases and would confer a legitimacy on the trials that is critical to restoring the United States’ reputation around the world. In deciding to try the Sept. 11 suspects in federal court, then, the Obama administration is eager to look like it’s still being tough on terrorism and its perpetrators. That may be influencing the decision to seek the death penalty.

Other countries have faced similar debates in the face of repeated terrorist attacks, and ultimately decided that executing terrorists was counterproductive. Although the death penalty is now outlawed in all European Union countries, when the U.K. House of Commons debated whether to repeal the death penalty in Northern Ireland in 1973, there was widespread agreement that executing terrorists, who often wanted to martyr themselves, would only lead to increased violence and terrorism.

The question raises a classic conundrum for criminal law theorists. Punishment in the American justice system is supposed to punish the criminal in a way that seems proportionate to the crime and also deter others from committing similar acts. But if suicide bombers are blowing themselves up for the cause, how much of a deterrent is the death penalty to these sorts of terrorists?

“It doesn’t make sense as a deterrent,” said Columbia Law Professor Jeffrey Fagan in an email. “Deterrence assumes a rational actor who perceives that the punishment costs exceed the benefits of the crime, and who will not act against his or her own self-interest. in this case, the punishment is no match for either the rewards of striking a significant blow at ‘The Great Satan’ or the rewards of martyrdom.”

Richard Dieter, Executive Director of the Death Penalty Information Center, agrees. “Terrorists expect to die or want to die,” he said. “There’s a chance that the death penalty feeds into that.” After the federal death penalty in the U.S. was expanded in 1994 to include terrorism, Dieter notes, “the very next year Timothy McVeigh blows up the Oklahoma federal building. So I don’t think anybody believes it’s much of a deterrent. It might even be an attractor.”

Of course, another purpose of criminal punishment is retribution. Under that theory, the criminal is supposed to get his just desserts –– an eye for an eye, in biblical terms. “For retribution, it doesn’t matter what his preferences are,” says Claire Finkelstein, professor of law and philosophy at the University of Pennsylvania Law School.

“Simply put, these monsters who specifically target civilians have no right to live,” wrote Rabbi Stuart Weiss, director of the Jewish Outreach Center of Ra’anana,in a recent op-ed in the Jerusalem Post, arguing that Israel, which has abolished the death penalty for almost all crimes, should reinstate it for terrorists. “They have forfeited the most basic human privilege by virtue of their crimes; any punishment save death is too good for them and is an obscene insult to the grieving victims of terror.”

It’s the classic notion of retribution. “The idea is that you return to the defendant what he has inflicted on the victim,” said Finkelstein. She herself doesn’t really think that’s possible, though. “There is no way to kill this man nearly 3,000 times, or force him to experience what his victims suffered as they tried to escape the twin towers,” she said.
Still, logical and even strategic considerations are often not what guides such decisions.

“There’s a lot of politics involved,” says Dieter. The Obama administration’s latest decisions on closing Guantanamo and trying terror suspects in federal court has opened it up to a rash of criticism from conservatives . “Maybe it’s part of this total picture that we’re closing this prison down there but that doesn’t mean we’re going to be soft on them,” said Dieter. “Once you open up the whole political world, the calculations are different.”

While the national unemployment rate of 10.2 percent is a sobering reminder of the depth of this recession and the protracted timeline a recovery will take, the challenges posed by long-term unemployment are far greater.

“We are breaking every record post-Great Depression on long-term unemployment,” said Heidi Shierholz, an economist with the Economic Policy Institute. Right now, around 35 percent of those without jobs have been unemployed for more than six months, a figure that adds up to 3.6 percent of our country’s labor pool.

[Economy]The result is a crisis unlike anything seen since the 1930s. “The numbers are unprecedented,” said John Challenger, CEO of Challenger, Gray & Christmas, a human resources consulting firm. “What it suggests and it bears out in reality is that as people become long-term unemployed, they become damaged goods in the job market.”

While economists are divided about the best way to combat this growing problem, most agree on how it happened. The current recession exacerbated an ongoing economic shift from manufacturing to a service base. Troubles faced by Detroit’s Big Three automakers fanned the flames, rendering the skills of many workers obsolete. Even as local economies withered on the vine, workers were rendered immobile, locked into their homes by the real estate crash.

Long-term unemployment is dangerous because it can have a snowball effect, says Kevin Lowden, managing economist at the Milken Institute. The longer someone is out of work, the more likely he or she is to default on his or her mortgage, even low-risk borrowers at the time when the loan was originated.

“You also see significant issues in terms of the effect on consumer demand due to the dramatic increase in savings rate,” he said. While this increase in savings is good for the economy long-term, right now that frugality comes at the expense of consumer spending that could lead to employers hiring more workers.

This epidemic of long-term unemployment also puts an added burden on government coffers. “This is direct drain on budgets in two ways,” said Dean Baker, co-director of the Center for Economic and Policy Research. Government doesn’t collect income tax on laid-off employees, and when these workers go onto unemployment or disability rolls, this creates an additional drain on the system.

For instance, the increase in workers applying for disability has shot up. Currently, some 7 million adults are on disability, an influx so overwhelming that the trustees of the Social Security program predict that the disability fund will be emptied by 2017 if nothing changes.

This mass migration to disability status is primarily a function of our employer-based health care system, according to Lawrence Katz, a professor at Harvard University. “If you have a pre-existing condition, even if you get another job there will be problems with your coverage,” he said. “The one place you can go is disability, where you get onto Medicare. And once they go on, they basically never come off.” Health plans currently under debate in Congress would subsidize low-income citizens and families, which would include the unemployed, as well as ban insurers from eliminating pre-existing conditions, which make going off disability feasible. Currently, those jobless for a long period of time have nothing to fall back on after their COBRA benefit expires.

Even if those who have been unemployed long-term make it back into the workforce, their future earning power suffers. There’s some evidence that post-layoff retraining can mitigate this, but only under certain circumstances. A study out of the University of Chicago’s Harris School of Public Policy Studies found that attending one year of community college gave displaced workers a 5 percent wage boost. Unfortunately, the vast majority of workers enrolled in such programs don’t stick around for even a semester, let alone a whole year.

However, for workers that stick it out and specialize in vocational training, science or mathematics, the returns can be even greater. The study’s authors found a 10 to 15 percent jump in wages for this subset of workers, as well as higher returns for those who already had some degree of college education prior to their participation in the program.

To this end, much of the work that is being done to combat long-term unemployment focuses on retraining workers so that their skills are more in alignment with today’s service-based economy. “The economy has changed fundamentally and our workforce system has not,” said Andy Levin, Michigan’s chief workforce officer, who runs that state’s No Worker Left Behind program. “Most people who lose their jobs can’t replace their standard of living without getting significant training because of the rapid and ongoing march of technology and globalization,” Levin said.

No Worker Left Behind began operating in August 2007 and is funded primarily by the Workforce Investment Act, which was created in the 90s and received $1.25 billion in stimulus funding to help dislocated workers. Since then, No Worker Left Behind has trained 102,000 at-risk or jobless Michigan residents for jobs in growing industries like health care, technology and transportation.

Levin has put into place bureaucratic efficiencies, such as standardizing which types of jobs are eligible for training subsidies throughout the state and streamlining the process that lets jobless workers continue to receive unemployment benefits while pursuing additional education. When the program conducted a survey this April, they found that nearly half of the workers who had completed training had landed a job, 86 percent in a field that related to their training.

Other economists say that programs such as No Worker Left Behind, while helpful, don’t do enough to address the root of the problem: the overwhelming lack of jobs. Although the pace at which companies are laying off workers has slowed, companies aren’t rehiring, which means there are still too few jobs to go around. Traditionally, small businesses are the first to hire when the economy picks up steam after a recession; however, small-business financing has dried up due to the credit crunch, preventing entrepreneurs from expanding and adding employees.

“The crisis is just so big at this point with 10.2 percent unemployment that we’re thinking about new direct job creation proposals because the scale of the problem is so large,” said Allegra Baider, senior legislative associate at the Center for Community Change. That group, along with a host of other advocacy and labor organizations, recently released a joint statement calling for new investment in job creation in fields such as infrastructure and education.

“A top priority ahead of job training is we’ve got to fix the labor market and start generating jobs,” said the Economic Policy Institute’s Heidi Shierholz. The Obama administration plans to hold a jobs summit next month examining incentives like tax credits to encourage businesses to hire new workers.

John Challenger of Challenger, Gray & Christmas acknowledged that even if such programs succeed, many Americans will have to make adjustments. “One of the things that’s happening is a steady career at one large company or in a company town is no longer available, and people at all levels can no longer think of their careers as always progressing upwards in income.” Even as they learn new skills, employees also have to be taught how to be flexible so they can adapt to the twists and turns of the 21^st-century economy.

President Barack Obama (WDCpix)

In signing the Defense Authorization Act, which, among other things, amends the laws governing military commissions, President Obama confirmed Wednesday that he plans to keep the controversial military commissions alive. The effect is to deny at least some suspected terrorists — now called “unprivileged enemy belligerents” — the right to a trial in a civilian federal court. And though Obama has promised to use the commissions sparingly, the new law sets up a parallel justice system that could outlive the Obama administration and leave an indelible stamp on its legacy.

So how different are the new military commissions from the old ones?

[Law1]Even those who fiercely oppose trying suspected terrorists in military commissions acknowledge that the months of wrangling over the legislation in Congress led to significant improvements over the Bush-era military commissions approved in the Military Commissions Act of 2006. Still, there are many lingering concerns. The new commissions allow the admission of coerced evidence in certain narrow circumstances. They allow the government to try children as war criminals. And, the new law would allow trials by military commission for offenses that are not traditionally considered war crimes. Those provisions leave even the new-and-improved military commissions vulnerable to constitutional challenge, and their verdicts open to reversal on appeal. And that could undermine the entire purpose of creating military commissions, which is ordinarily to provide swift justice when ordinary courts are not available.

Many legal experts and human rights advocates say the improvements over the 2006 Military Commissions Act are significant.

Under the amendments, an “unprivileged enemy belligerent” — what the Bush administration used to call an “enemy combatant” — is entitled to competent, experienced defense counsel, particularly if the suspect might face the death penalty. The previous commissions did not provide for defense lawyers with significant experience handling capital cases.

The new commissions also require that most statements of the accused must have been “voluntary” to be admitted at trial. That’s in addition to the requirement that the statements were not solicited by torture, or by cruel, inhuman or degrading treatment, as defined by the Detainee Treatment Act. Of course, the Detainee Treatment Act was interpreted by the Bush administration’s lawyer very liberally, so even extreme sleep and food deprivation, stress positions, threatening dogs and confinement with an insect in a small box was deemed lawful under that standard. But adding that the statement must also be “voluntary” — a change pressed by the Obama administration at several Congressional hearings — raises the bar significantly higher.

On the other hand, there is an exception. Statements are admissible even if not “voluntary” if “the statement was made incident to lawful conduct during military operations at the point of capture or during closely related active combat engagement, and the interests of justice would best be served by admission of the statement into evidence.”  It remains to be seen how narrowly a judge will construe that.

The admission of hearsay evidence has been narrowed as well. The new law requires whoever introduces the evidence to give the other side enough advance warning to see the evidence and prepare a response, and the judge, in weighing the evidence, must “take into account all of the circumstances surrounding the taking of the statement, including the degree to which the statement is corroborated, the indicia of reliability within the statement itself, and whether the will of the declarant was overborne…” Then, in addition, the judge has to find that the statement is relevant and probative of a fact of the case, that it’s impractical to get direct testimony from the witness, and that “the general purposes of the rules of evidence and the interests of justice will best be served by admission of the statement into evidence.” That essentially mirrors the hearsay exception for evidence provided in a civilian federal court.

As for the admission of classified evidence, the military commission has to follow the same procedures a civilian federal court would to determine how and if the evidence can be used, and to what extent and in what form the accused and his lawyer are entitled to see it.

But if the procedural safeguards are so similar to those in federal court, then why have the military commissions at all? The question is even more important because Congress, in passing this law, defined the court’s jurisdiction to include crimes that are not traditionally war crimes, such as conspiracy, and suspects who are not traditionally considered war criminals, such as those who provide “material support” for terrorism. Even Assistant Attorney General David Kris, testifying before Congress, testified that it’s not clear that those crimes — which are commonly charged against terror suspects in civilian federal courts — can constitutionally be brought before a military commission. Justice Stevens, in the case of Hamdan v. Rumsfeld, in an opinion joined by three other justices, specifically notes that “conspiracy” has not traditionally been considered a war crime. (The court did not ultimately rule on that basis, so it’s not clear how a majority would rule on it now.) Therefore, defense lawyers could argue that for Congress to make it a war crime after the suspect’s crime was committed would be an unconstitutional “ex post facto” law, says Shayana Kadidal, senior managing attorney of the Guantanamo Global Justice Initiative at the Center for Constitutional Rights.

For the administration to bring a terrorism case before a military commission and be sure to avoid this issue, then, it would have to avoid charging conspiracy and substantial support for terrorism. Those charges are made in almost all terrorism cases.

Which raises the question, why bring cases in military commissions at all?

Justice John Paul Stevens in Hamdan argued that the purpose of military commissions is “military necessity.” Yet in this situation, as many legal experts have pointed out, it’s not at all clear that these commissions are necessary.

As the ACLU’s Jameel Jaffer said in a statement released yesterday after the President signed the new law: “The commissions remain not only illegal but unnecessary – the federal courts have proven themselves capable of handling complex terrorism cases while protecting both the government’s national security interests and the defendants’ rights to a fair trial.”

Many other lawyers and advocates agree. A study conducted by former prosecutors for Human Rights First, for example, found that civilian federal courts had successfully prosecuted more than 214 terrorism cases since September 11, 2001. Prosecutors won 195 convictions, and successfully handled the challenges of unavailable witnesses, classified evidence, undercover informants and other complexities that arise in terrorism cases, the report found. By contrast, the military commissions created by President Bush after the 9/11 attacks and subsequently authorized by Congress tried only three cases. In only one of those did the defendant even put on a defense. In that case, Salim Hamdan, Osama bin Laden’s driver, was sentenced to only five and a half years in prison, with credit for the more than five years he’d already served. He was released to his home country of Yemen in January.

Part of the reason the military commissions have been so ineffective is because they were vulnerable to constitutional challenge. But legal experts say that even the new commissions would be vulnerable. As ACLU attorney Chris Anders put it, “they’ve narrowed the gap, but they still fall far short of the due process guarantees in Article III courts, which will still make them vulnerable to reversals.”

“This is a brand-new system, for the third time,” said Kadidal, referring to the two earlier incarnations of the military commissions during the Bush administration. The first commission system was invalidated by the U.S. Supreme Court, and the second was suspended by the Obama administration.

“This lesser degree of process is not justice,” said Virginia Sloan, president of the bipartisan Constitution Project, in a statement released yesterday. “Furthermore, these modest improvements cannot save the irretrievably tainted military commissions.”

The Obama administration surely knows that these cases are vulnerable to challenge, particularly since Congress included provisions in them that Justice Department lawyers admitted were legally questionable. And it’s not clear that it wants to bring important cases in the military commissions, and risk having convictions of major terrorists reversed on appeal.

What’s more, there’s no “sunset provision” in the legislation, so the military commissions can exist indefinitely. That’s also contrary to what the administration itself asked for. David Kris, testifying before the Senate Armed Services Committee, noted that traditionally, “military commissions have been associated with a particular conflict of relatively short duration.” Buy contrast, the current conflict “could continue for a much longer time.”

The result is that the military commissions could outlast the Obama presidency, raising another potentially sticky point that the Obama administration might prefer to avoid. “By not having a sunset provision,” said Kadidal, “this system will be a permanent part of President Obama’s legacy.”

Center for Constitutional Rights Executive Director Vincent Warren yesterday made the point even more starkly: “These are now President Obama’s military commissions: he owns them and all of the problems that come with them, and their inevitable failure will scar his legacy and embolden our critics in the world. Military commissions are an unnecessary, jury-rigged creation, second-rate in comparison to our legal system. Obama is tinkering with the Constitution for no good reason.”

Federal Reserve Chairman Ben Bernanke (WDCpix)

Federal Reserve chairman Ben Bernanke announced last month that the recession was “likely over” and that the economy was in the early stages of a recovery. The problem is, many Americans don’t look around and see a recovery due to the still-abysmal unemployment rate. What’s scarier is that those numbers are probably going to get worse before they get better. The Congressional Budget Office predicts unemployment peaking at 10.2 percent next year and remaining at a very high 9.1 percent in 2011.

Illustration by: Matt Mahurin

“What people care about is numbers that affect their lives — employment, pay, housing. The story in almost all those cases looks bad,” said Dean Baker, director of the Center for Economic and Policy Research. “In one sense the recession will be over, but for all practical purposes, it still will be a recession for most people.”

In other words, we’re looking at a jobless recovery. “What it means is that the economy is recovering for Wall Street and business profits but it’s not distributing that prosperity effectively, and that’s not the recovery we need,” said Andrew Stettner, deputy director of the National Employment Law Project. “It’s not a true recovery until it lifts the fortunes of average Americans,” he added. Waiting for that could take a while: the Congressional Budget Office estimates it could take another five years to get back to America’s pre-crash unemployment rate.

Unlike recessions from roughly the end of World War II until the 1980s, a bounce-back in U.S. jobs isn’t going to come from the nation’s giant manufacturing sector cranking itself back up. While America still does produce goods both for export as well as for consumption at home, the 20th-century manufacturing-based economy has shifted to a service-oriented one, and roughly 70 percent of our economy these days is driven by consumer spending. As a result, recent recoveries have tended to be jobless ones in which the employment rolls take much longer to catch up with the rise in GDP that signals a recovery. After the 2001 recession, it took 17 quarters — more than four years — for the labor market to recover.

The severity of this recession as well as the enormous number of jobs lost is already creating a strain on the nascent recovery, and experts say it presents a number of challenges for average Americans as well as policy-makers. One of the most glaring is the issue of health care. The importance of the ongoing health care debate — and the need for reform — is highlighted by the plight of the unemployed when it comes to health insurance.

Currently, laid-off employees are eligible to remain in their employer’s group pool through the COBRA program for up to 18 months. Historically, many people who lose their jobs turn down the COBRA coverage because it requires individuals to shoulder the entire cost of the premium by themselves. In an acknowledgement that this is no ordinary recession, the federal $787 billion stimulus package includes a provision providing unemployed workers with a 65 percent subsidy of their COBRA premiums for nine months.

This is unprecedented, and yet many economists say it’s not nearly enough. “A lot of the people who start being unemployed aren’t reemployed after nine months,” Burtless said. The number of Americans on the jobless rolls for months or even years at a time is already swelling and expected to grow, which means it’s increasingly likely that the unemployed will run through their COBRA benefits by the time they land a new job. Even if a worker is lucky enough to land a job that includes health insurance (which is no guarantee these days, either), restrictions on pre-existing conditions kick in, leaving an untold number of Americans without a healthcare safety net.

Health insurance isn’t the only issue, though. “It’s a desperate situation because it’s going to be long term,” warned CEPR’s Baker. “Today you have people getting benefits, but people might be out of work for two or three years, and we’re not set up for having high rates of unemployment.” Baker points out that other developed nations are better equipped for a situation like this because of programs like long-term unemployment insurance, housing assistance and health care.

Prolonged unemployment is a double-whammy for those stuck without jobs for extended periods; not only are they out of work, but when the economy rebounds, they’re more likely to be passed over by the companies doing the rehiring in favor of people who have exited the workforce more recently. According to Lawrence Katz, a professor of economics at Harvard University, the unintended consequence of this escalation will be to push more workers into disability and early Medicare programs. “That becomes the only option and the difficulty with that is once people go on disability programs they basically never leave, which becomes very expensive,” he warned.

Benefits like unemployment payments are also facing a similar strain that’s likely to get worse before it gets better. Right now, laid-off workers in the states most severely impacted by the recession can draw up to 79 weeks of unemployment benefits. As with the COBRA subsidy, this is already an extension above and beyond the norm, but it’s not clear how much more of an appetite the federal government has to subsidize long-term joblessness.

There are a couple of encouraging signs that the government does understand the severity of the problem and is taking steps to address it. Support for a payroll tax credit, one oft-cited measure for increasing employment, is gaining support among both parties in Congress. One suggested version would give companies a credit of double the payroll tax for every employee hired or converted from part- to full-time. “We did a new jobs tax credit in the ‘70s that had some impact,” said Harvard’s Katz, adding that a broader wage subsidy would have a similar impact on the private sector but also offer employment support to nonprofits, as well.

The government could take a more direct role in boosting employment, Brookings’ Gary Burtless suggests. “I expect that if job creation is very anemic on private payrolls and continue to have a Democratic administration, there’s going to be a lot of initiative to somehow increase the share of the government’s stimulus efforts on job creation.”

It’s also possible that job-creation programs in stimulus bill may yet play a role in shoring up payrolls, although even pro-stimulus economists think that role will be minor. “It’s probably to date created between 700,000 to a little over a million jobs,” said CEPR’s Dean Baker. “It will make more of a difference, but it’s not big enough.”

There are still a couple of factors that could turn the tide in workers’ favor. Andrew Stettner points out that the stimulus-led investment in clean energy and “green” technology has the potential to put the U.S. back in the manufacturing game. “Right now, we’re borrowing and consuming. We need to move our economy more broadly to producing and inventing by investing in it to make it more competitive,” he said.

On a somewhat grimmer note, if America’s recovery lags behind that of our major trade partners or if the dollar is weak for a prolonged period, a surge in demand for exports could be a silver lining for the employment rate. Similarly, inventories in this country have been pared down so far that a big uptick in demand could lead to hiring, but since so much of what we consume comes from overseas, any employment boost there would be shared with other countries.

The worst-case scenario, says Brookings’ Gary Burtless, is that we experience a recession on par with the very steep one in 1981-82, but without the jobs recovery that followed. If this happens, Andrew Stettner of NELP predicts a societal fragmentation of nearly unprecedented magnitude. “I think you’ll start seeing a divided consciousness between the haves and have-nots by next year. Those who did lose their jobs and their savings will be increasingly isolated.”