DiscussionDIVAS

Bonuses? Are you kidding me?

Here at the WeeklyDIVA we’re all about keeping the news real and fun, but man, it’s ugly out there. Just to rub salt on the wounds, a new report says banks—yes, those ones that were bailed out with billions of taxpayer dollars—shelled out $18.4 billion in bonuses last year.

Pause.

Are you kidding me?

That’s right, bonuses averaging $112,000 were doled out even as banks struggled to stay alive, buying up each other and accepting (and asking for more) government money.

Certainly bonuses in the boom years of 2006 and 2007 were better, totaling $36 billion and $34 billion, respectively, but it’s still enough for a party! Oh financial work is hard, we know, we know. And of course not everyone was bundling up toxic subprime mortgages, or buying and selling insurance against them—there are still a few good bankers out there.

But still, the public relations on this one is about as bad and tone deaf as when the CEOs of all three U.S. car companies flew in individual private jets to Washington and asked for bailout money.

On to the news of the week
So we searched far and wide, high and low for something more fun to focus on this week, but the doom and gloom economic news really is the story of the hour—65,000 U.S. jobs (that we know of) lost on Monday alone, 500,000 expected to be lost in January. The economy didn’t expand last quarter, it shrank, according to the new GDP numbers, which came in Friday as the worst in 27 years.

Now that the proposed $819 billion stimulus package has already passed in the House (a completely partisan vote with only Democrats voting for it), let’s look at where the money is going:
American Recovery and Reinvestment Act
This bill is divided into discretionary spending and direct spending. Discretionary spending is appropriated each year by Congress, meaning they can adjust allocations over the life of the stimulus (about 10 years), but the bulk is expected to be spent in the next three.
The Discretionary spending section includes money for states and infrastructure, defense and energy, with the bulk going toward “labor, health and human services, and education.”
Direct spending is a set amount determined as part of the act and would go toward Medicaid, tax refunds ($500 for individual filers and $1,000 for joint), plus health insurance and aid to unemployed people. Read the bill. | See a breakout on spending.
The big picture

The stimulus still has to make it through the Senate where the Democrats have 17-person majority but not enough of one to stop a filibuster by Republicans, which would prevent a vote on the bill. The Senate version is bigger—closer to $900 billion—and many are saying the package should be “shelved” to focus on fixing the banks first, or be broken up into smaller pieces. We’ll see what happens next week.

Obama keeps it real

“If I’m doing something stupid, somebody in Chicago can send me and email and say, ‘What are you doing?’”

 

 

President Barack Obama may have offered that line in an effort to hold onto his beloved BlackBerry (apparently his pleadings were worth millions of dollars in product placement for the company and he will be allowed to keep it), but the question he wants asked of himself is a question he also seemed to pose to the country this week: “What are you doing?”

 

From the day of service on Monday to his inauguration speech Tuesday to the swift actions he took in his first few days of office, the theme of individual and shared responsibility echoed everywhere.

 

Here’s a quick recap of the steps taken and changes made by the new administration this week since Tuesday:

 

• Tuesday night: New administration halts all military tribunals for 120 days. The request issued together with the Defense Department will allow time for review of U.S. process on these hearings. The halt effects 21 pending trials.

• Wednesday: Obama issues two executive orders and three presidential memorandums. The gist of these included a pay freeze for White House employees making more than $100,000 (minding the economy here), allowances for more and easier access to presidential records and government information (the big deal here is repeal of restrictions placed during the Bush administration on the Freedom of Information Act, which was signed in 1966 to allow the public access to government documents by request), and tighter rules on lobbying—officials in his administration can lobby old colleagues for the entire length of his presidency and former lobbyists working for him can’t lobby agencies they lobbied in the last two years.

• Thursday: Obama signs executive orders toshut down Guantanamo Bay prison camp in one year and also close secret prisons and camps, which were set up by the CIA in 2002. The exact number of secret prison camps is not known.

The big picture
After years of dismay by the public and press about how tight lipped the government became post 9/11, Obama moved quickly in his first week to restore some of the basics set forth by the Constitution—that the U.S. is an open democracy that doesn’t hide behind a veil of secrecy—pleasing historians and the press in particular. Of course there’s a long road ahead of him with so many challenges but Obama certainly seemed to take responsibility for some of his campaign promises—demonstrating individual responsibility. And now the question is, what are you doing?

Big wins for women

On Tuesday the United States will shatter one major glass ceiling when Barack Obama is sworn in as president. And if this week was any indication, maybe it will be a year of shattering ceilings.

2009: The year of the woman?
Sen. Hillary Clinton was on the Hill this week, and was quickly endorsed endorsed to become Secretary of State. Arizona Gov. Janet Napolitano also appeared, vying to become director of homeland security. A third female cabinet nominee—Hilda Solis, who is up for Labor Secretary—appeared last week.

Even so there were two other big wins for women this week: a new female CEO at Yahoo and the Lilly Ledbetter Fair Pay Act.

More women at the helm
The appointment of Carol Bartz to the CEO job at Yahoo brought the number of women running Fortune 500 companies to a record 14. The last time we touched on this was in 2006, when there were 11. 

Lilly Ledbetter
During the campaign you may have heard Obama talk about Lily Ledbetter, or maybe you saw her speak at the Democratic National Convention.

Ledbetter was a long-time employee of Goodyear Tire & Rubber Co., who received an anonymous note in her mailbox confirming something she suspected: male counterparts were making more money. She sued and won. Goodyear appealed to the Supreme Court, which ruled 5 to 4 that suits must be filed within 180 days of the first paycheck after discovering the pay gap. In 1998, Ledbetter inquired in March about the discrepancy, filed a complaint with the EEOC in July, retired, and filed suit in November, so she lost. 

Lilly Ledbetter Fair Pay Act
You'll be hearing more about Lilly Ledbetter because she's also the lead character in a bill that's working its way through Congress. The legislation that has already passed in the House says every new paycheck resets the 180-day time limit, allowing for more room to file suit. The Senate will soon vote on the bill.

The big picture
Obama talked a lot on the campaign trail about narrowing the pay gap between men and women, often referring to the fact that he's raising two daughters. Opponents say this legislation will put businesses at risk of a slew of lawsuits.

It's not new news that women make on average 80 cents on the dollar to men, a controversial number some say because of various factors--women aren't in the workforce as long, and so on. But even a government report shows that when accounting for various factors, pay differences still exist for reasons they aren’t sure about. (See the report.) 

In cases that are apples to apples, like the Ledbetter case seems to be, I'm always reminded of a friend who at bonus time would pick up the phone and call her male colleagues to find out what they got. Did their bonus match hers for doing the same job? It seems Lilly Ledbetter is just making the legal case for the same concept; Obama says he'll sign legislation if it reaches his desk. Sometimes, as with the economy, it takes a little help from the government.

Education as stimulus

Friday headlines are swirling around the gloomy jobs picture—over a half million jobs were lost in December, pushing the unemployment rate to 7.2% and making 2008 the worst year for jobs since 1945. Calgon, take me away!

The good news is Obama's on the case, working hard before officially taking office to lay the groundwork for recovery. On Thursday he called on Congress to act boldly and quickly on his proposed $800 billion stimulus plan, which includes infrastructure spending, a doubling of alternative energy production in three years, and tax cuts—a plan he thinks will save three million jobs.

But his plan also includes a longer-term investment feature: resources for education. Hooray! 
In the prepared text he released before delivering his stimulus stump speech, Obama wrote: "To give our children the chance to live out their dreams in a world that's never been more competitive, we will equip tens of thousands of schools, community colleges, and public universities with 21st century classrooms, labs, and libraries. We'll provide new computers, new technology, and new training for teachers so that students in Chicago and Boston can compete with kids in Beijing for the high-tech, high-wage jobs of the future." It gives ya shivers!

Education on his mind
Even before Thursday educators were excited about Obama's campaign pledge to invest $10 billion into early education. Some of his platform is built around the idea that every dollar spent on children when they are really young returns multiple dollars back to society and reduces the need for spending on other various public services. One controversial but frequently mentioned study on this point from the 1960s—the Ypsilanti study—showed about $15,000 spent over two years on a child returned about $244,000 per child 40 years later. 

A brief snapshot on education costs
The latest stats show that public schools spend about $9,138 per student, a number that varies from state to state because most funding for education comes from state and local dollars. The Constitution actually puts the responsibility of K-12 education in state’s hands. New York spends the most: $14,884; Utah spends the least: $5,437. The federal government contributes just 10% to the costs, about $500 billion a year and just a fraction of what the government will spend to fix the economy.

Meanwhile as the number of college graduates holds steady around 30% of the population, the cost of higher education continues to rise. The average college costs for tuition and room and board are $14,000 for in-state students and $25,000 for out-of-state kids at public universities. The average at private universities is $34,000 per year. Princeton says it wants to raise next year's tuition 3% as the economy weakens and its endowment plunged, and certainly more schools will follow suit. 

Financial aid requests are already up 16%. Just this week The Princeton Review released a list of the 100 “Best Value” colleges, including a rank of the top 10 public and private values. Top public: University of Virginia. Top private: Swarthmore College. See the list. 

The big picture
Whether or not more spending for education comes from the stimulus package, the education conversation is gathering steam despite the economic woes. Major philanthropists like Bill Gates have put their energy behind helping schools, as studies show U.S. students lagging behind international peers in math and science. Reformers like Michelle Rhee in D.C. are making waves, attempting to tie school performance closer to teacher pay. Even President Bush pushed for education as a key focus going forward in one of his last speeches in office, touting No Child Left Behind, which is likely to be revamped.

Israel and Palestine in focus

The new year begins with a familiar battle in the Middle East: fighting between Israel and the Palestinians. The current battle is more specifically between the Israeli military and Hamas, the Islamist military group that controls the Gaza Strip. Here's a brief update of what's happening.
First, some background:
As you know, the Palestinian territories are divided into two areas separated by Israel: Gaza and the West Bank. Gaza sits along the Southwestern side of Israel, with the Mediterranean Sea to the west and Egypt to the south. There are two main factions (or political parties) that make up Palestinian government structure, Hamas and Fatah. Hamas rules Gaza; Fatah rules the West Bank, which borders much of Israel on the eastern side. The main difference between Fatah and Hamas is that Hamas does not recognize Israel's right to exist as a country.
Almost since Israel became a state in 1948, Fatah has led the charge for Palestinian statehood (since the 1950s). Then in 2006, barely a year after Yasser Arafat of Fatah died, Hamas won the parliamentary elections. In the summer of 2007 Hamas violently ousted Fatah from Gaza and claimed control, sparking a battle that sent the U.S. and the European Union to aid Fatah (we posted about this). Israel tightened controls at the border to Gaza, essentially freezing its 1.5 million people inside with little resources.
The latest battle
For months Hamas has routinely launched rockets into Israel, which Israel says have recently begun to reach further inside the country though there has been relatively little damage. Over the summer Egypt brokered a peace deal between Hamas and Israel, with Hamas agreeing to stop firing rockets and Israel agreeing to loosen border controls. But the cease-fire was fragile at best with each side testing the other. By Dec. 27, the truce was over and Israel launched air attacks on Gaza. So far some 400 Gaza residents—some Hamas personnel and some civilians—have been killed versus a handful of Israelis. 
The big picture

During the fighting Hamas' buildings have come under attack and a top leader was killed. Israel says its intentions are to stop Hamas from firing rockets into Israel. Certainly Israel's military is far more powerful than Hamas, and their campaign is angering many Muslims in the Middle East. The international community is discussing ways to halt the fighting and certainly this latest conflict will be top on the agenda for the new U.S. administration.