Maryland's love-fest with its working class citizens was on grand display this week as I give just a few examples of my own experiences. Before I start a discussion on health care I'd like to remind everyone in Maryland that you have a government hostile to workers. O'Malley, Rawlings-Blake, and all incumbents in Baltimore and Maryland legislature embrace policies that are pro-corporation and hurt labor. Listening to WYPR this morning I listened as the commentator reporting on the Chicago teacher's strike placed a very sharp emphasis on 'teachers strikes are illegal in Maryland'. Indeed that was the vote a few sessions back. I wrote into WYPR praising their attention to what is illegal in a city known for fraud and corruption and reminded them that the businesses in the Inner Harbor, like the Cheesecake Factory and Cordish's Power Plant are all breaking labor laws on workplace safety and time-card manipulations while signing business tax credit contracts that require they meet all these city labor laws. Maybe they'll lash out at business law and not labor law.
In another case I'm walking to the train station and I pass three Asian workers scraping and painting a big apartment building. One worker is a grandmother. None of them wore masks as they scrapped what was sure to be lead paint off an old building....they didn't speak English and probably didn't know about health risk and lead paint. All three worked for the wages of one American painter. IS THIS THE AMERICA YOU WANT? Remember, we have such a level of violence and crime in Baltimore because people can't find work.......this is why. Next, a week after the IndyRace I walk past workers assigned to break down the bleachers and fencing. It is the same group I spoke with last week. They work for an Indiana company and had workers from Florida helping with the work. Baltimore had construction workers on the picket line walking in circles. They said they travelled and lived like long-distance truck drivers. Both states are right -to -work.
On my way home I passed a private contractor working on the sewer. They were a small operation doing a large city project and completely different from the last private company I saw working on public works just a few blocks away. Each was an out of town company. Now, call me crazy, but having dozens of independent subcontractors doing work on city public systems begs for problems: consistency in performance and materials first and foremost; who is overseeing this rag-tag deployment; how will you hold the subcontractor of a subcontractor responsible for failed work (answer you don't because no one checks the work); and again the out-of-town labor. IT IS ABSOLUTELY INCREDIBLE FOLKS..............IT IS MIND-BOGGLING THAT THIS IS ALLOWED TO HAPPEN. ALL IN AN EFFORT TO DOWN-SIZE PUBLIC EMPLOYEES. AFTER ALL, WHO WANTS TO GIVE EMPLOYEES A LIVING WAGE AND BENEFITS WHEN THEY CAN CIRCUMVENT THE SYSTEM WITH SUBCONTRACTING TO SUBCONTRACTORS!
Lastly I'd like to segue into my next topic of health care by speaking to this week's Board of Estimates meeting. I will start by saying I clued our local 'investigative media' for local TV news to this glaring problem and simply got the look of a startled cat.....after all, the last thing media wants to be apart of is news on fraud and corruption. I attended the meeting of the State's Health Benefit Insurance Exchange development team this week headed by Dr. Sharfstein. I sent him my diatribe on the billions lost to the state in health fraud and the fact that reform was sending all of Medicaid to what we know are fraudulent private health chains as well as the inconvenient fact that Maryland has no health fraud laws. So, we are watching a system rife with entitlement fraud developed in a way that will see even more fraud. THAT IS HEALTH REFORM IN MARYLAND.
Today's entry showed the hand off of Maryland Medical Assistance Program to INDEPENDENT CONTRACTORS AND NOT EMPLOYEES OF THE CITY. THESE CASE MONITORS WILL EXERCISE INDEPENDENT PROFESSIONAL JUDGEMENT AND CARRY PROFESSIONAL LIABILITY INSURANCE. IT GOES ON TO DESCRIBE THE CASE WORKERS DUTIES......the maximum number of assigned cases per individual Case Monitor per month at any time is 75, UNLESS A WAIVER IS RECEIVED. It shows a Milda Primrose Lewis, Inc receiving $45 per case with 130 cases a month receiving $70,200. There was a similar employee listing for Montgomery County. Now, it is widely documented that the State's social workers routinely complained of having numbers as high as 500 cases when they were to have 70 cases per month. I also made the comment about the young lady driving a new Porsche telling a friend 'I got me a nursing business' and who told me she had no specific medical training other than attending a program. I will speak more to this in the coming days.......but it is more than clear that we will see TENS OF THOUSANDS of Medicaid patients handed to these private agencies with the agencies charging for services these clients don't receive......after all they didn't receive service with the state and the logistics are impossible.
THIS IS A MASSIVE FRAUD IN THE MAKING!!!!
VOTE YOUR INCUMBENT OUT OF OFFICE!!!!
FROM BALTIMORE BREW:
THIS WAS FROM LAST YEAR'S CITY BUDGET:
Last week $621,960 in state funds was approved to hire eight registered nurses and Dynamic Medical Support Services to monitor residents eligible for the Maryland Medical Assistance Program. This week the city Health Department seeks permission to spend $180,900 in state funds to hire three more RNs, plus $504,000 to hire four more private agencies – Karib Services, Inc., Trulife Health Services, Welltrust Co. and Milda Primrose Lewis, Inc. as case monitors. The monitors will visit the homes of medical assistance clients at least every 90 days, according to the agreement.
YOU CAN SEE THE ABSOLUTE CHAOS OF CONTRACTING AND THE COSTS ADDED BECAUSE OF INEFFICIENCY AND/OR SIMPLY A CONTRACTOR BID DELIBERATELY LOW-BALLED TO GET THE CONTRACT.
IF WE SIMPLY HIRED CITY EMPLOYEES TO DO THE WORK WE WOULD HAVE A NEAT, CONSOLIDATED SYSTEM OF WORK THAT WOULD BE FAR MORE COST EFFECTIVE THAN THIS MESS. ANY GOVERNMENT AGENCY NOT DOING GOOD WORK CAN BE TRACED TO UNDERFUNDING AND/OR POOR MANAGEMENT......SIMPLY FIX THAT RATHER THAN PRIVATIZE.
City set to approve cost overruns for water and downtown street projects
Two extra work orders and a $4 million contract to Monumental Paving are among the items before the Board of Estimates today Mark Reutter July 27, 2011 at 6:01 am Baltimore Brew
The crisp road surface and crosswalks on the 100 block of W. Lexington Street are nice, but the work cost 32% above the original bid price.
UPDATE: In a meeting lasting less than three minutes, the Board of Estimates approved all of the spending items listed below without discussion. City Council President Bernard C. “Jack” Young abstained from voting on the Monumental Paving & Excavating water repair contracts and the Falls Rd. water main replacement.
For the second time in a month, the city water bureau is asking the Baltimore Board of Estimates to approve a water repair contract whose cost has ballooned many times over its original competitive bid.
The extra work order on today’s agenda – on a contract originally awarded for $453,076 to Monumental Paving & Excavating – will raise the total price to $2,307,996, according to board records. The extra work is described as “drainage repairs and improvements at various locations,” without further explanation.
The same company is also due to receive $236,000 in cost overruns involving its repaving of the 100 block W. Lexington Street downtown.
Last month, City Auditor Robert L. McCarty Jr. criticized the bureau of water and wastewater for adding 18 extra work orders to a contract to Spiniello Co., a New Jersey water pipeline contractor. The extra orders, for additional emergency and scheduled work, upped the price of that contract from $10.4 million to nearly $20 million.
McCarty said the award to Monumental Paving was examined by the city’s change order review committee and involved repairs that had not been started, unlike the Spiniello contract. McCarty said the city considers it more efficient to let a contractor complete extra work on an existing contract, especially for unanticipated costs, rather than rebid the contract.
Generous Campaign Donor
In addition to the extra work order, Monumental Paving is also expected today to win Board of Estimates approval of a $3,984,398 contract to “repave [water] utility cuts at various locations.”
New brick paving, crosswalks and cut-outs were recently finished by Monumental Paving, replacing the old pedestrian mall on Lexington Street. (Photo by Fern Shen)
George P. Mahoney Jr., owner of Monumental Paving, is known for his generous support of local Democratic officeholders. He’s already given the maximum $4,000 donation to Mayor Stephanie Rawlings-Blake’s re-election campaign.
Mahoney was reported out of the office and unavailable yesterday. Company President Paul Crowl, reached on his cellphone, said he was not authorized to discuss the cost overruns.
Monumental Paving’s $235,840 in additional fees for resurfacing Lexington Street between Park Avenue and Liberty Street stems from a contract approved last August by the Board of Estimates.
Board documents do not disclose why the repaved street cost 32% above its $736,520 bid price. Civil Construction LLC, of suburban Washington, protested the original bid, but its protest was rejected by the board.
Monumental Paving also beat out Civil Construction in a controversial $18.3 million contract last October to grade and lay pipes at the Uplands redevelopment project in west Baltimore.
Other Spending Items
Here are other major spending items waiting approval today from the five-member spending board composed of Mayor Rawlings-Blake, City Council President Bernard C. “Jack” Young, City Comptroller Joan M. Pratt, Public Works Director Alfred W. Foxx and City Solicitor George Nilson:
• $6,927,766 to American Infrastructure, Inc., for the replacement of the Fort Avenue Bridge over CSX Railroad. Several “disadvantaged business enterprises” (DBEs) will share in the contract, including Machado Construction Co. ($300,000), Bay City Construction ($400,000), C. Jones Trucking ($393,000) and Genesis Steel Service ($264,000).
• $2,043,095 to M. Luis Construction Co. to resurface various roads in northwest Baltimore. Fallways Construction Co., a DBE, will share 9.6% of the contract.
• $1,951,690 for “Falls Rd. water main replacement” to Casper Colosimo & Son. Machado Construction Co. is the main minority contractor, winning 15.4% share of the contract.
________________________________________________
THE MOVEMENT TO PRIVATIZE IS DRIVEN BY SENDING PROFITS TO CORPORATIONS BUT ALSO TO UNDERMINE THE PUBLIC SECTOR UNIONS....ONE OF THE LARGEST UNIONS LEFT. ULTIMATELY IT HAS BECOME IMPOSSIBLE TO FOLLOW FRAUD......JUST AS WITH FINANCIAL INSTRUMENTS THAT ARE SO 'COMPLICATED' AS TO AVOID OVERSIGHT.
THIS IS WHERE ARE TAX MONEY IS GOING AND IS WHY THEY ARE CUTTING SERVICES AND EMPLOYEES.
VOTE YOUR INCUMBENT OUT!!!!!
HERE IS A REAL PROGRESSIVE VIEW:
Robert B. Reich: Economic recovery hinges on re-creation of 'basic bargain' Baltimore Sun
The question at the core of America's upcoming presidential election isn't merely whose story most voting Americans believe to be true -- Mitt Romney's claim that the economy is in a stall and President Barack Obama's policies haven't worked, or Mr. Obama's claim that it's slowly mending and his approach is working.If that were all there was to it, last Friday's report from the Bureau of Labor Statistics showing the economy added only 96,000 jobs in August -- below what's needed merely to keep up with the growth in the number of eligible workers -- would seem to bolster Mr. Romney's claim.
But, of course, congressional Republicans have never even given Mr. Obama a chance to try his approach. They've blocked everything he's tried to do -- including his proposed Jobs Act that would help state and local governments replace many of the teachers, police officers, social workers and firefighters they've had to let go over the last several years.
The deeper question is what should be done starting in January to boost a recovery that by anyone's measure is still anemic. In truth, not even the Jobs Act will be enough.
At the Republican convention in Tampa, Fla., Mr. Romney produced the predictable set of Republican bromides: cut taxes on corporations and the already rich, cut government spending (mainly on the lower middle class and the poor), and gut business regulations.
It's the same supply-side nonsense that got the economy into trouble in the first place.
Corporations won't hire more workers just because their tax bill is lower and they spend less on regulations. In case you hadn't noticed, corporate profits are up. Most companies don't even know what to do with the profits they're already making. Not incidentally, much of those profits have come from replacing jobs with computer software or outsourcing them abroad.
Meanwhile, the wealthy don't create jobs, and giving them additional tax cuts won't bring unemployment down. America's rich are already garnering a bigger share of American income than they have in 80 years. They're using much of it to speculate in the stock market. All this has done is drive stock prices higher.
The way to get jobs back is to get American consumers to spend again.
Consumer spending is 70 percent of the nation's economic activity. Most of it comes from the middle class and those aspiring to join the middle class. They're the real job creators.
But here's the problem. Middle-class consumers won't and can't spend because their savings are depleted, their homes are worth a fraction of what they were five years ago, their wages are dropping, and they're worried about keeping their jobs.
And they're no longer able borrow against the rising values of their homes because the housing bubble burst -- which means they can no longer pretend they're in better financial shape than they really are.
This is the heart of our economic dilemma.
Last Thursday night at the Democratic convention in Charlotte, N.C., President Obama suggested a way to correct this, or at least not make things worse: Raise taxes on the wealthy rather than cut programs the middle class and poor depend on (such as Medicare and Medicaid); give tax incentives to companies that create jobs in the United States; and invest in education.
It's a start, but America's middle class and poor need far more. They need to be able to refinance their mortgages at today's low interest rates. They need a larger Earned Income Tax Credit -- a wage subsidy for lower-paying jobs. And they need a higher minimum wage that's automatically adjusted for inflation.
They could use a new Works Project Administration and Civilian Conservation Corps designed to put the long-term unemployed back to work.
They need stronger unions to bargain for a larger share of the gains from economic growth. And a Social Security payroll tax that exempts the first $25,000 of income and eliminates the ceiling (now $110,100) on income subject to it.
And they need an industrial policy designed to create high-wage jobs in America.
In accepting his party's nomination for president, Mr. Obama said the "basic bargain" that once rewarded hard work and gave everyone a fair shot had come undone.
He's right. And the U.S. economy won't return to normal until that basic bargain is remade.
If Mr. Obama gets a second term, re-creating that bargain -- and getting enough votes from Congress to do so -- will be his central challenge, and America's.
Robert B. Reich, Chancellor's Professor of Public Policy at the University of California and former U.S. Secretary of Labor, is the author of "Beyond Outrage: What has gone wrong with our economy and our democracy, and how to fix it," a Knopf release now out in paperback.
In another case I'm walking to the train station and I pass three Asian workers scraping and painting a big apartment building. One worker is a grandmother. None of them wore masks as they scrapped what was sure to be lead paint off an old building....they didn't speak English and probably didn't know about health risk and lead paint. All three worked for the wages of one American painter. IS THIS THE AMERICA YOU WANT? Remember, we have such a level of violence and crime in Baltimore because people can't find work.......this is why. Next, a week after the IndyRace I walk past workers assigned to break down the bleachers and fencing. It is the same group I spoke with last week. They work for an Indiana company and had workers from Florida helping with the work. Baltimore had construction workers on the picket line walking in circles. They said they travelled and lived like long-distance truck drivers. Both states are right -to -work.
On my way home I passed a private contractor working on the sewer. They were a small operation doing a large city project and completely different from the last private company I saw working on public works just a few blocks away. Each was an out of town company. Now, call me crazy, but having dozens of independent subcontractors doing work on city public systems begs for problems: consistency in performance and materials first and foremost; who is overseeing this rag-tag deployment; how will you hold the subcontractor of a subcontractor responsible for failed work (answer you don't because no one checks the work); and again the out-of-town labor. IT IS ABSOLUTELY INCREDIBLE FOLKS..............IT IS MIND-BOGGLING THAT THIS IS ALLOWED TO HAPPEN. ALL IN AN EFFORT TO DOWN-SIZE PUBLIC EMPLOYEES. AFTER ALL, WHO WANTS TO GIVE EMPLOYEES A LIVING WAGE AND BENEFITS WHEN THEY CAN CIRCUMVENT THE SYSTEM WITH SUBCONTRACTING TO SUBCONTRACTORS!
Lastly I'd like to segue into my next topic of health care by speaking to this week's Board of Estimates meeting. I will start by saying I clued our local 'investigative media' for local TV news to this glaring problem and simply got the look of a startled cat.....after all, the last thing media wants to be apart of is news on fraud and corruption. I attended the meeting of the State's Health Benefit Insurance Exchange development team this week headed by Dr. Sharfstein. I sent him my diatribe on the billions lost to the state in health fraud and the fact that reform was sending all of Medicaid to what we know are fraudulent private health chains as well as the inconvenient fact that Maryland has no health fraud laws. So, we are watching a system rife with entitlement fraud developed in a way that will see even more fraud. THAT IS HEALTH REFORM IN MARYLAND.
Today's entry showed the hand off of Maryland Medical Assistance Program to INDEPENDENT CONTRACTORS AND NOT EMPLOYEES OF THE CITY. THESE CASE MONITORS WILL EXERCISE INDEPENDENT PROFESSIONAL JUDGEMENT AND CARRY PROFESSIONAL LIABILITY INSURANCE. IT GOES ON TO DESCRIBE THE CASE WORKERS DUTIES......the maximum number of assigned cases per individual Case Monitor per month at any time is 75, UNLESS A WAIVER IS RECEIVED. It shows a Milda Primrose Lewis, Inc receiving $45 per case with 130 cases a month receiving $70,200. There was a similar employee listing for Montgomery County. Now, it is widely documented that the State's social workers routinely complained of having numbers as high as 500 cases when they were to have 70 cases per month. I also made the comment about the young lady driving a new Porsche telling a friend 'I got me a nursing business' and who told me she had no specific medical training other than attending a program. I will speak more to this in the coming days.......but it is more than clear that we will see TENS OF THOUSANDS of Medicaid patients handed to these private agencies with the agencies charging for services these clients don't receive......after all they didn't receive service with the state and the logistics are impossible.
THIS IS A MASSIVE FRAUD IN THE MAKING!!!!
VOTE YOUR INCUMBENT OUT OF OFFICE!!!!
FROM BALTIMORE BREW:
THIS WAS FROM LAST YEAR'S CITY BUDGET:
Last week $621,960 in state funds was approved to hire eight registered nurses and Dynamic Medical Support Services to monitor residents eligible for the Maryland Medical Assistance Program. This week the city Health Department seeks permission to spend $180,900 in state funds to hire three more RNs, plus $504,000 to hire four more private agencies – Karib Services, Inc., Trulife Health Services, Welltrust Co. and Milda Primrose Lewis, Inc. as case monitors. The monitors will visit the homes of medical assistance clients at least every 90 days, according to the agreement.
YOU CAN SEE THE ABSOLUTE CHAOS OF CONTRACTING AND THE COSTS ADDED BECAUSE OF INEFFICIENCY AND/OR SIMPLY A CONTRACTOR BID DELIBERATELY LOW-BALLED TO GET THE CONTRACT.
IF WE SIMPLY HIRED CITY EMPLOYEES TO DO THE WORK WE WOULD HAVE A NEAT, CONSOLIDATED SYSTEM OF WORK THAT WOULD BE FAR MORE COST EFFECTIVE THAN THIS MESS. ANY GOVERNMENT AGENCY NOT DOING GOOD WORK CAN BE TRACED TO UNDERFUNDING AND/OR POOR MANAGEMENT......SIMPLY FIX THAT RATHER THAN PRIVATIZE.
City set to approve cost overruns for water and downtown street projects
Two extra work orders and a $4 million contract to Monumental Paving are among the items before the Board of Estimates today Mark Reutter July 27, 2011 at 6:01 am Baltimore Brew
The crisp road surface and crosswalks on the 100 block of W. Lexington Street are nice, but the work cost 32% above the original bid price.
UPDATE: In a meeting lasting less than three minutes, the Board of Estimates approved all of the spending items listed below without discussion. City Council President Bernard C. “Jack” Young abstained from voting on the Monumental Paving & Excavating water repair contracts and the Falls Rd. water main replacement.
For the second time in a month, the city water bureau is asking the Baltimore Board of Estimates to approve a water repair contract whose cost has ballooned many times over its original competitive bid.
The extra work order on today’s agenda – on a contract originally awarded for $453,076 to Monumental Paving & Excavating – will raise the total price to $2,307,996, according to board records. The extra work is described as “drainage repairs and improvements at various locations,” without further explanation.
The same company is also due to receive $236,000 in cost overruns involving its repaving of the 100 block W. Lexington Street downtown.
Last month, City Auditor Robert L. McCarty Jr. criticized the bureau of water and wastewater for adding 18 extra work orders to a contract to Spiniello Co., a New Jersey water pipeline contractor. The extra orders, for additional emergency and scheduled work, upped the price of that contract from $10.4 million to nearly $20 million.
McCarty said the award to Monumental Paving was examined by the city’s change order review committee and involved repairs that had not been started, unlike the Spiniello contract. McCarty said the city considers it more efficient to let a contractor complete extra work on an existing contract, especially for unanticipated costs, rather than rebid the contract.
Generous Campaign Donor
In addition to the extra work order, Monumental Paving is also expected today to win Board of Estimates approval of a $3,984,398 contract to “repave [water] utility cuts at various locations.”
New brick paving, crosswalks and cut-outs were recently finished by Monumental Paving, replacing the old pedestrian mall on Lexington Street. (Photo by Fern Shen)
George P. Mahoney Jr., owner of Monumental Paving, is known for his generous support of local Democratic officeholders. He’s already given the maximum $4,000 donation to Mayor Stephanie Rawlings-Blake’s re-election campaign.
Mahoney was reported out of the office and unavailable yesterday. Company President Paul Crowl, reached on his cellphone, said he was not authorized to discuss the cost overruns.
Monumental Paving’s $235,840 in additional fees for resurfacing Lexington Street between Park Avenue and Liberty Street stems from a contract approved last August by the Board of Estimates.
Board documents do not disclose why the repaved street cost 32% above its $736,520 bid price. Civil Construction LLC, of suburban Washington, protested the original bid, but its protest was rejected by the board.
Monumental Paving also beat out Civil Construction in a controversial $18.3 million contract last October to grade and lay pipes at the Uplands redevelopment project in west Baltimore.
Other Spending Items
Here are other major spending items waiting approval today from the five-member spending board composed of Mayor Rawlings-Blake, City Council President Bernard C. “Jack” Young, City Comptroller Joan M. Pratt, Public Works Director Alfred W. Foxx and City Solicitor George Nilson:
• $6,927,766 to American Infrastructure, Inc., for the replacement of the Fort Avenue Bridge over CSX Railroad. Several “disadvantaged business enterprises” (DBEs) will share in the contract, including Machado Construction Co. ($300,000), Bay City Construction ($400,000), C. Jones Trucking ($393,000) and Genesis Steel Service ($264,000).
• $2,043,095 to M. Luis Construction Co. to resurface various roads in northwest Baltimore. Fallways Construction Co., a DBE, will share 9.6% of the contract.
• $1,951,690 for “Falls Rd. water main replacement” to Casper Colosimo & Son. Machado Construction Co. is the main minority contractor, winning 15.4% share of the contract.
________________________________________________
THE MOVEMENT TO PRIVATIZE IS DRIVEN BY SENDING PROFITS TO CORPORATIONS BUT ALSO TO UNDERMINE THE PUBLIC SECTOR UNIONS....ONE OF THE LARGEST UNIONS LEFT. ULTIMATELY IT HAS BECOME IMPOSSIBLE TO FOLLOW FRAUD......JUST AS WITH FINANCIAL INSTRUMENTS THAT ARE SO 'COMPLICATED' AS TO AVOID OVERSIGHT.
THIS IS WHERE ARE TAX MONEY IS GOING AND IS WHY THEY ARE CUTTING SERVICES AND EMPLOYEES.
VOTE YOUR INCUMBENT OUT!!!!!
HERE IS A REAL PROGRESSIVE VIEW:
Robert B. Reich: Economic recovery hinges on re-creation of 'basic bargain' Baltimore Sun
The question at the core of America's upcoming presidential election isn't merely whose story most voting Americans believe to be true -- Mitt Romney's claim that the economy is in a stall and President Barack Obama's policies haven't worked, or Mr. Obama's claim that it's slowly mending and his approach is working.If that were all there was to it, last Friday's report from the Bureau of Labor Statistics showing the economy added only 96,000 jobs in August -- below what's needed merely to keep up with the growth in the number of eligible workers -- would seem to bolster Mr. Romney's claim.
But, of course, congressional Republicans have never even given Mr. Obama a chance to try his approach. They've blocked everything he's tried to do -- including his proposed Jobs Act that would help state and local governments replace many of the teachers, police officers, social workers and firefighters they've had to let go over the last several years.
The deeper question is what should be done starting in January to boost a recovery that by anyone's measure is still anemic. In truth, not even the Jobs Act will be enough.
At the Republican convention in Tampa, Fla., Mr. Romney produced the predictable set of Republican bromides: cut taxes on corporations and the already rich, cut government spending (mainly on the lower middle class and the poor), and gut business regulations.
It's the same supply-side nonsense that got the economy into trouble in the first place.
Corporations won't hire more workers just because their tax bill is lower and they spend less on regulations. In case you hadn't noticed, corporate profits are up. Most companies don't even know what to do with the profits they're already making. Not incidentally, much of those profits have come from replacing jobs with computer software or outsourcing them abroad.
Meanwhile, the wealthy don't create jobs, and giving them additional tax cuts won't bring unemployment down. America's rich are already garnering a bigger share of American income than they have in 80 years. They're using much of it to speculate in the stock market. All this has done is drive stock prices higher.
The way to get jobs back is to get American consumers to spend again.
Consumer spending is 70 percent of the nation's economic activity. Most of it comes from the middle class and those aspiring to join the middle class. They're the real job creators.
But here's the problem. Middle-class consumers won't and can't spend because their savings are depleted, their homes are worth a fraction of what they were five years ago, their wages are dropping, and they're worried about keeping their jobs.
And they're no longer able borrow against the rising values of their homes because the housing bubble burst -- which means they can no longer pretend they're in better financial shape than they really are.
This is the heart of our economic dilemma.
Last Thursday night at the Democratic convention in Charlotte, N.C., President Obama suggested a way to correct this, or at least not make things worse: Raise taxes on the wealthy rather than cut programs the middle class and poor depend on (such as Medicare and Medicaid); give tax incentives to companies that create jobs in the United States; and invest in education.
It's a start, but America's middle class and poor need far more. They need to be able to refinance their mortgages at today's low interest rates. They need a larger Earned Income Tax Credit -- a wage subsidy for lower-paying jobs. And they need a higher minimum wage that's automatically adjusted for inflation.
They could use a new Works Project Administration and Civilian Conservation Corps designed to put the long-term unemployed back to work.
They need stronger unions to bargain for a larger share of the gains from economic growth. And a Social Security payroll tax that exempts the first $25,000 of income and eliminates the ceiling (now $110,100) on income subject to it.
And they need an industrial policy designed to create high-wage jobs in America.
In accepting his party's nomination for president, Mr. Obama said the "basic bargain" that once rewarded hard work and gave everyone a fair shot had come undone.
He's right. And the U.S. economy won't return to normal until that basic bargain is remade.
If Mr. Obama gets a second term, re-creating that bargain -- and getting enough votes from Congress to do so -- will be his central challenge, and America's.
Robert B. Reich, Chancellor's Professor of Public Policy at the University of California and former U.S. Secretary of Labor, is the author of "Beyond Outrage: What has gone wrong with our economy and our democracy, and how to fix it," a Knopf release now out in paperback.
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