HOW THE DEMOCRATS MISSED OUT WITH THE STIMULUS BILL

John Zogby, in a Forbes article, suggests that the Democrats are using the wrong words. The public doesn't like the term "stimulus" but does support job creating programs. The GOP can attack a phrase like "stimulus" in a way that's much harder when you're talking about "creating jobs."

But Zogby puts too much emphasis on the semantics. For example, he cities there issues that got majority approval:

--Tax breaks for employers who must use the money to add employees, 81%

--Federal aid to states and localities used to retain jobs in education, public safety and other public functions, 58%

--Public employment programs such as those created during the Depression, 56%.

Says Zogby: "The three approaches that voters liked were all, to some extent, part of the stimulus bill. But when they were lumped under the popular title of 'stimulus bill,' support plummeted.

It's true that the above approaches were minor parts of the stimulus bill, but they were far from the top of the list. Thus it wasn't just the words that were wrong; it was the DemoCrats' priorities.

STOP BANKING WITH THE BAD GUYS

You don't have to keep your checking account with one of the big bad guys. You can switch to a community bank or a credit union. Here's some good advice from Move Your Money:

Not all community banks are risk free. Some of them got involved in the same risky behavior that took down some of the biggest banks. We suggest two options for looking into the small and community banks in your area:

1. Thanks to the volunteer services of a group called Institutional Risk Analytics, you can get a listing of the most sound community banks near you. IRA lists only banks that, according to its rating system, which is based on government data, get a grade of "B" or better.

Find top rated community banks near you

Like the FDIC for banks and thrifts, the National Credit Union Administration insures the deposits of credit unions and is a good resource for financial data on specific institutions. Credit unions do not disclose financial data in the same way as FDIC-insured banks. As a result, credit unions are not presently included in the IRA ratings database, which covers over 8,000 federally insured banks and thrifts. IRA is developing a method to rate credit unions in a way that is comparable to the IRA bank stress ratings.

Find credit unions near you

2. Go to the Independent Community Bankers of America site and do a zip-code search. Or, if you're interested in credit unions, go to Credit Unions National Association and do a zip-code search. Then go to BankRate.com and see how it rates the banks or credit unions you're interested in.

STRANGE BEDFELLOWS WORKING TOGETHER TO BRING THE BIG BANKS BACK DOWN TO SIZE

BEFORE YOU APPLY FOR AN APPLEBEE'S TABLE WAITING JOB, BE SURE TO FINISH COLLEGE

NY Times - When her supervisor asked her to go for a walk, Theone Ferron, an office manager at a pharmaceutical company, feared the worst. Her company had already laid off about a quarter of its employees. And by the end of her walk with her boss, Ms. Ferron had joined the ranks of the jobless, let go without any severance pay. She was eight months pregnant with her second child. . .

Initially, she sought a position similar to the one she had lost, but without success. "There are just too many executives who are willing to take a step down and do that work," she said.

She was turned down for a waitress's job at an Applebee's restaurant because she had not finished college, she said, a rejection that still makes her shake her head. "Can you believe they wanted a degree just to wait tables?"

HOW BUSINESS SCHOOLS HURT AMERICA'S ECONOMY

Noam Scheiber, New Republic - Since 1965, the percentage of graduates of highly-ranked business schools who go into consulting and financial services has doubled, from about one-third to about two-thirds. And while some of these consultants and financiers end up in the manufacturing sector, in some respects that's the problem. Harvard business professor Rakesh Khurana, with whom I discussed these questions at length, observes that most of GM's top executives in recent decades hailed from a finance rather than an operations background. (Outgoing GM CEO Fritz Henderson and his failed predecessor, Rick Wagoner, both worked their way up from the company's vaunted Treasurer's office.) But these executives were frequently numb to the sorts of innovations that enable high-quality production at low cost. As Khurana quips, "That's how you end up with GM rather than Toyota."

. . . Up until World War I, the archetypal manufacturing CEO was production oriented-usually an engineer or inventor of some kind. Even as late as the 1930s, business school curriculums focused mostly on production. Khurana notes that many schools during this era had mini-factories on campus to train future managers.

After World War II, large corporations went on acquisition binges and turned themselves into massive conglomerates. In their landmark Harvard Business Review article from 1980, "Managing Our Way to Economic Decline," Robert Hayes and William Abernathy pointed out that the conglomerate structure forced managers to think of their firms as a collection of financial assets, where the goal was to allocate capital efficiently, rather than as makers of specific products, where the goal was to maximize quality and long-term market share.

By the 1980s, the conglomerate boom was reversing itself. Investors began seizing control of overgrown public companies and breaking them up. But this task was, if anything, even more dependent on fluency in financial abstractions. The leveraged-buyout boom produced a whole generation of finance tycoons-the Michael Milkens of the world-whose ability to value corporate assets was far more important than their ability to run them.

The new managerial class tended to neglect process innovation because it was hard to justify in a quarterly earnings report, where metrics like "return on investment" reigned supreme. "In an era of management by the numbers, many American managers . . . are reluctant to invest heavily in the development of new manufacturing processes," Hayes and Abernathy wrote. "Many of them have effectively forsworn long-term technological superiority as a competitive weapon." By contrast, European and Japanese manufacturers, who lived and died on the strength of their exports, innovated relentlessly

The country's business schools tended to reflect and reinforce these trends. By the late 1970s, top business schools began admitting much higher-caliber students than they had in previous decades. This might seem like a good thing. The problem is that these students tended to be overachiever types motivated primarily by salary rather than some lifelong ambition to run a steel mill. . .

THE HUGE PERSONAL COST OF ECONOMIC COLLAPSE

NY Times - More than half of the nation’s unemployed workers have borrowed money from friends or relatives since losing their jobs. An equal number have cut back on doctor visits or medical treatments because they are out of work.

Almost half have suffered from depression or anxiety. About 4 in 10 parents have noticed behavioral changes in their children that they attribute to their difficulties in finding work.

Joblessness has wreaked financial and emotional havoc on the lives of many of those out of work, according to a New York Times/CBS News poll of unemployed adults, causing major life changes, mental health issues and trouble maintaining even basic necessities. . .

With unemployment driving foreclosures nationwide, a quarter of those polled said they had either lost their home or been threatened with foreclosure or eviction for not paying their mortgage or rent. . .

But the impact on their lives was not limited to the difficulty in paying bills. Almost half said unemployment had led to more conflicts or arguments with family members and friends; 55 percent have suffered from insomnia.

LOCAL HEROES: BERNIE SANDERS ON BERNANKE

Bernie Sanders, Guardian, UK - Last year, the American people overwhelmingly voted for a change in our national priorities and for a new direction on the economy. After eight long years of trickle-down economics that benefitted millionaires and billionaires while leaving the middle class behind, Americans demanded a change that would put the interests of ordinary people ahead of the greed of Wall Street and the wealthy few.

What the American people did not bargain for was another four years for one of the key architects of the Bush economy.

Before Ben Bernanke became the Fed chairman in 2006, he headed the council of economic advisers for President Bush - one of the most right-wing presidents in American history. He also sat on the Fed board of governors from 2002 to 2005. Perhaps more than anyone else, Bernanke was in a position to diagnose the impending economic disaster and take steps to stop it. Tragically, not only did he fail to prevent the economic collapse that we have experienced, he did not even warn the American people that it was coming until it was too late. Equally distressing, his actions since the crisis began may leave taxpayers holding the bag for an even bigger bailout in the future. . .

Since Bernanke took over as Fed chairman, the unemployment rate has more than doubled and, today, an incredible 17% of the American workforce is either unemployed or underemployed.

Not since the Great Depression has the financial system been as unsafe, unsound, and unstable as it has been during Bernanke's tenure. More than 120 banks have failed since he became chairman, despite the Fed's army of nearly 3,000 bank supervisors with broad powers to maintain the safety and soundness of financial institutions.

Under Bernanke's watch, the value of risky derivatives held at our nation's top commercial banks grew from $110tn to more than $290tn, 95 per cent of which are concentrated in just five financial institutions. While Bernanke was asleep at the wheel, Warren Buffett, as early as 2003, called derivatives "financial weapons of mass destruction" and warned that they posed a "mega-catastrophic risk" to the economy.

Bernanke failed to prevent banks from issuing deceptive and unfair financial products to consumers. Under his leadership, mortgage lenders were allowed to issue predatory loans they knew consumers could not afford to repay. This risky practice was allowed to continue even though the FBI warned in 2004 of an "epidemic" in mortgage fraud that had the potential to become "the next S&L crisis".

After the financial crisis hit, Bernanke's response was to provide trillions of dollars in virtually zero-interest loans and other taxpayer assistance to some of the largest financial institutions in the world. Adding insult to injury, Bernanke has refused to tell the American people the names of the institutions that received this handout or the terms involved. Trillions of taxpayer dollars are at risk and Mr Bernanke continues to hide the names!

Further, despite the American people spending $700bn bailing out huge financial institutions because they were "too-big-to-fail," Bernanke has allowed three of the four largest financial institutions in the country to become even larger than they were before the financial collapse.

In the midst of a horrendous economic crisis that has caused massive suffering in this country Bernanke had the opportunity to force irresponsible and corrupt Wall Street firms to change their ways. The chairman could have demanded that Wall Street provide adequate credit to small businesses to create decent-paying jobs. He could have insisted that bailed-out banks end the usurious practice of charging interest rates of 30% or higher on credit cards. He could have required bailed out banks to stop making risky bets in derivatives. He could have required bailed-out-banks to modify mortgages so that homeowners could afford to stay in their homes. He could have required too-big-to-fail banks become smaller. He could have instituted a major investigation of how the financial collapse occurred in the first place, and held chief executives at those banks accountable.

Instead, Wall Street, with Bernanke's help, has instituted a system of "heads they win, tails taxpayers lose". If Wall Street wins, their executives receive millions in bonuses and they keep all of their profits. If Wall Street loses, taxpayers bail them out, and their executives still keep their bonuses.

As the middle class of this country continues to suffer, we need a chairman of the Fed who is more concerned about expanding the productive economy - increasing decent-paying jobs for all Americans - than continuing to fan the flames of Wall Street greed that precipitated this crisis.

ABOUT A QUARTER OF MODIFIED HOME LOANS STILL FALLING BEHIND

LA Times - About 25% of borrowers helped under the administration's massive foreclosure prevention plan have already fallen behind on their new mortgage payments, according to government data that raise new questions about the program's effectiveness.

The delinquency figures reflect the latest troubles of the program, known as Making Home Affordable. Treasury Department officials this week announced a campaign to put new pressure on lenders to do more to move struggling homeowners into loans with easier terms.

So far, more than 650,000 borrowers have been enrolled into the initial or trial phase of the program and have seen their payments lowered by an average of $640 a month, or 40%. But a recent survey of large mortgage servicers published by the Treasury Department found that more than 25% of borrowers in the program were not current on their trial payments.

Moving homeowners from the trial phase into a permanent modification has become the program's latest stumbling block. Borrowers must make three payments and submit documents proving that they qualify for the program to move forward, but a bottleneck has emerged, with few homeowners making it through. JPMorgan Chase & Co., which signed up more than 178,000 homeowners, noted last month that 22% of borrowers helped didn't make their first payment.

If borrowers struggle to keep up with their modified mortgage payments, housing experts said, it could diminish the effectiveness of the program, which the administration hopes will help as many as 4 million borrowers.