Poverty in the United States

This week we got some unsettling news on income, poverty, and education that should leave us all deeply concerned.

Here are the facts from the census bureau as reported by the Wall Street Journal.

- the income of the typical American family has dropped for the third year in a row, is at the same level as 1996 when adjusted for inflation and 7% below its peak in 1999

-income of a household considered to be at the statistical middle fell 2.3% to an inflation-adjusted $49,445 in 2010

-Earnings of a typical man who works full-time year round are lower than in 1978 when adjusted for inflation

-Women are making 77 cents for every dollar earned by comparably employed men and their median incomes rose in 2010

-22% of American children live below the poverty line, up from 20.7% in 2009, and the biggest percentage since 1993 ( thought this significantly overstates poverty my mission government transfers)

-US per capita net worth is $169,691, up from $147,889 in 2007

-14 million Americans remain unemployed

-16.3% of Americans do not have health insurance, or 49.9 million people.

-5.9 million Americans between 25 and 34 (14.2% of that group) lived with their parent in Spring 2011, compared to 4.7 million (11.8%) before the recession

- the results from the college entrance exam, taken by about 1.6 million students, revealed that only 43% of students posted a score high enough to indicate they were ready to succeed at college.

(for many more FACTS check out the resource section of this web-site)

President Obama on Job Creation

Here is my recount of the speech tonight. Where possible, I quoted. Thoughts at the end.

“We meet at an urgent time in our country. We still face the impact of the Financial Crisis and Political Crisis that has made things worse.”The U.S. has thrived under the basic concept that if you worked hard, you could make it in this country. That has eroded.“There are steps we can take right now to make a difference.”“American Jobs Act” – pass it right away. (most repeated line of the night) “Everything in this bill will be paid for. Everything. Point to put more people back to work, and more money in the pockets of people who are working. Small businesses are where most jobs are created.” Payroll tax credits for small business. Next. Spend money on schools. We will spend money on infrastructure. Tax credits for hiring veterans. Tax credits for hiring young people. Tax people who have been looking for a job for longer than 6 months. Extend unemployment insurance. No tax increases on the middle class.

Now… how to fund.

I will release a more ambitious deficit reduction plan next week… which includes increasing taxes on families earning more, as well as corporations. Medicare reform needed. “We need a tax code where everyone pays their fair share.”

Says we can do this. Create jobs and pay for it. A question of priorities. We need to out innovate companies in other countries. We need to shorten the patent process. Make exporting easier and more cost effective. We need to strengthen American company’s competitiveness. “Made in America.” ( lots of cheers) Training. Internships. Ra Ra.

“We can’t afford wasteful spending. We can’t burden business. I ordered a review of all government regulations. What we can’t do is let this economic crisis be used to wipe out basic protections that Americans have counted on for decades.” He rejects a lot of ideas…. (all good) “America should be in a race to the top.” ( lots of cheers)

“We built America together.” Members of Congress we need to meet our responsibilities. Everything I laid out will be paid for. ( really????)

Ended with a huge and passionate call to action. We cannot wait to pass this jobs bill.

My commentary…

Overall a really great speech. Big picture he spoke well to the issue of job creation, but it is the actual policies and practices that matter. Sounded great. Problem is that based on what I have read there is not enough money in taxing the rich and closing loopholes for corporations to fund new programs and tax breaks, let alone narrow the deficit. This was a pep rally for all things American, and it was good. We do have to come together to solve problems. Many are in serious need and to help. Agree.

“Do what you can, with what you have, where you are.”

Debt. Debt. Debt.

Debt. Debt. Debt. That was all we heard about this summer and with good reason. The US is in horrible shape and the numbers below put it all in perspective.

Here is why S&P downgraded the US credit rating.

* U.S. Tax revenue: $2,170,000,000,000

* Fed budget: $3,820,000,000,000

* New debt: $ 1,650,000,000,000

* National debt: $14,271,000,000,000

* Recent budget cut: $ 38,500,000,000

Now let's remove 8 zeros and pretend it's a household budget.

* Annual family income: $21,700

* Money the family spent: $38,200

* New debt on the credit card: $16,500

* Outstanding balance on the credit card: $142,710

* Total budget cuts: $385

This Thursday the President is being called upon to explain how is going to get the economy going again. Unlike the last go around, his options are more limited. Because of the numbers above which we have all been living and breathing for the fast few months, he does not have the ability to keep spending, nor should he. The public is demanding jobs but the problem is that our economy was fueled by spending financed through debt, and that has all but dried up. It is time to get creative and provide incentives for the private sector to invest and thus create employment opportunites. We are likely going to be in this slow to no growth scenerio for a while. For those expecting miracles, you may have a long time to wait

New Study Shows Working Mothers Do No Harm to Their Young Children

A new "long-term study by University College London suggests young girls fare better if their mothers go out to work." (link to article and study) I wish that wasn't the headline. I wish that we were past needing or wanting studies and headlines like this that pit working mothers against stay at home ones. Reality is though we still live in a world were women who work, whether by pure economic need or other reasons, are too often made to feel or just feel, that their children will suffer because of it.

We also still live in a country that does not do enough to support working parents. "The ideal scenario for children of both sexes was for both parents to live at home and for both to be working, a finding that will encourage policymakers' moves to help families stay together, if not critics of the rising numbers of working mothers." This should have been the headline for the research. Policies and practices like maternity leave, pay-equity, paid sick leave, compassionate leave are not women's issues, they are family issues and need increasingly to be framed as such for the health of our children, our communities and our nation.

To learn more about the issues please check out the Institute for Women's Policy Research.

Say NO to All Male Corporate Boards! - HUFFPO

It was an honor to co-write this oped with Joe Keefe, CEO of PAX World Funds. There is so much discussion about the lack of women on corporate boards, and here is something YOU can do to take action. Vote your proxy! PAX is leading the way in this effort and also writing letters to CEOs with all male boards putting forth the evidence that more diverse boards lead to better decision making. Thank you Joe I will hope others will follow - institutional investors, investment advisors and individuals!!

For more information on PAX Click here.

Women In America!

After 10 days of travel - LA for fun and San Fran for a 3 day Women's Funding Network Board Meeting and Retreat I am back and caught up! I am suffering from blog constipation. There are SO MANY topics all blocked up and I need to get them out!! I will try a blog a day for a while. After three years of blogging without focusing on how to really get my blog out there, I think it is time to get my act together. I just read about a mommy blogger who has millions of followers. Inspiring! Ok, on to the topic for today!

It is Women's History Month!! In honor of this the WHITE HOUSE is having a call on WOMEN IN AMERICA! They just released a HUGE report on this topic and can be downloaded here. It looks absolutely incredible. Be sure to check it out and share the link.

Some Facts About the Deficit

Deficit reduction is likely to be the hottest, domestic, political topic this year so let me arm you with some facts according to the WSJ.

- The government is currently spending about $100 billion more a month then it is taking in, adding about $1.3 trillion to the federal debt per year.

- Right now the government only has $400 billion before it hits the $14.3 trillion ceiling. ( and there is really no way to avoid hitting it)

- I love this quote - "Today's deficits are political problem, tomorrow's economic threat."

- Federal borrowing grew by $3.9 trillion between the end of 2007 and the third quarter of 2010. ( Why? to cushion the blow of the economic downturn)

- Every additional $100 billion borrowed this year adds $43 billion in interest over the next 10 years.

My comments to this - Scary. The numbers are extraordinary. When we raise the debt ceiling the federal debt will exceed our national GDP. This does not include state and local debt. You have likely been reading that there are HUGE issues in the muni area right now as bond holders are worried about the ability of many issuers to repay. This does not include mortgage debt, credit card debt, corporate debt, high yield debt...... We are an indebted nation and to a large extent that has been good, it has fueled growth, but at the end of the day it comes down to this. can the debt payments be made? No, for the subprime mortgage market and that is what contributed greatly to the financial crisis. Partial no for commercial real estate which has also caused big issues. So far yes for government, but at what cost to our future? The federal government can print money which is a good thing if you need to pay people. Printing does risk credibility and the credibility is reflected in both interest rates and exchange rates. Again so far ok because many other developed countries are in the same position and hey, we are the US, the world's largest economy.

So where does that leave me? Worried, as i have been for some time. Worried for the economic future of our collective children. I teach my children to be financially responsible. I teach them to spend within their means and our nation's capital is not exactly setting a good example.

Fannie and Freddie and $259 billion

On February 25th, 2008 I wrote my first OPED about Fannie Mae and Freddie Mac. (click here from FB)The piece was called Quickfixonomics, and appeared on the Huffington Post. At that time I criticized the government for increasing their loan limits as their balance sheets were already a complete mess. I cannot imagine how much THAT MOVE contributed to the $259 BILLION in total expected losses that were reported yesterday. $259 BILLION. Can you all please think about that number. This is not TARP, this is not WALL STREET, these losses are the result of government creating agencies to make homes more affordable for Americans. I have written dozens of blog entries about these two and it is truly just heartbreaking. Now what? is really the question. The truly sad thing is these losses will likely continue and go higher. They have no way to hedge their portfolio that I can think of against decreasing home prices and defaults. Given they own and guarantee trillions of mortgages, and home prices have decreased on average around 30%, it likely means this number is going to be much, much higher.

Now I really hate playing the blame game but this makes be angry. Years and years ago when Fannie and Freddie were printing money for their shareholders and bringing down mortgage rates it was all good, and so they kept expanding their portfolios because as a publicly traded company, that was what they were suppose to do. By buying trillions of mortgages they 'crowded out' other natural purchasers of bonds, perhaps forcing them in to investment strategies and products that were not optimal. ( think Alt A, subprime mortgages, and the like) I have done this rant before in one of my other dozens of entries on these mortgage giants but every time I see another headline about how much money they have lost I lose it. $259 billion. THIS WAS AVOIDABLE. The responsibility for oversight of these organizations was by people that are still in power today, like Barney Frank. I would argue that if Fannie and Freddie did not exist in the form they did, we would not have had this financial crisis. Were they the only players? No of course not. But go down the path of imagining the financial world, and especially the securitized world, without the likes of them, and I don't think you would end up where we are. Note that no other country has the likes of Fannie and Freddie, and they did not experience a financial crisis like the US did.

$259 billion and rising. It is all just so sad. Regarding this foreclosure mess. My gosh.. I don't even know where to start. I am really worried this will all lead to the next inning of financial market chaos.

For all the blogs I have written on Fannie and Freddie go to my web-site and search Fannie.

www.jackizehner.com

Women's Equality Day. Reason to celebrate? Not quite yet...

Today is Women's Equality Day, the commemoration of women’s suffrage achieved in 1920. Is there a lot to celebrate? Yes and no. Yes there has been much progress since 1920, but no, as we are far from achieving anything close to equality in this country. Is it not time, I mean really, to ask ourselves why not? I can sort of see why it might not matter to men, but to women? To girls? If you think we have arrived, then please feel free to quote me the statistics to prove it. Yes women are over half the college graduates, but we still make 77 cents to the male dollar. Women are still so far from being equally represented in leadership positions and in elected positions. Far. We are way more likely to be poor, to experience violence, to be exploited. A better world for women is a better world for men too. It is not a win lose.

To commemorate this special day I wrote this article that appears on BLOOMBERG with the most incredible Linda Tarr-Whelan, author of "Women Lead the Way: Your Guide to Stepping Up to Leadership and Changing the World." We put forth a call to action -" We need a national conversation led by the White House to explore how women decision-makers can help achieve better economic performance and a more prosperous future for all. It is time." It is time to take the matter of gender equality in this country seriously. It is time.

"The Time is Now For Women to Stand Up and Start up"

This is a great article about women and social media from the blog ComSCORE. Thanks to Linda Ambraham for the post.

"Now maybe this gender disparity is not particularly noteworthy or an issue even worthy of consideration. After all, technology has often been the purview of men, so doesn’t the composition of the start-up community merely reflect that fact? That may be the case. But it is only when you understand just how important women are to the fabric of the digital media landscape that you begin to see the opportunity for women in our industry – and why the time is now for women to stand up and start up."

Love that last line. I think we (the royal we) have been good about pointing out the challenges, barriers and inequities but Linda is right, ladies if we don't like the landscape, then it is up to US to help change it. Let's use our power to create positive change and break open the gates to opportunity and advancement for all. Gender balance. Shared power. Let's live it, breathe it, and act with that goal in mind in all we do.

"The Female Factor" plus a Theory of Change...

The International Herald Tribune continues it's great series - The Female Factor. This recent article reflects on the findings of the PEW Research Center study on Gender Equality. The article is called "Equal Rights for Women? Survey Says: Yes, but ..." The study found that in general both women and men believe in the concepts of equal rights and equal opportunity, though there are country differences. Despite that belief, the survey found that in reality of we do not have that, so the real question is then why? Why despite the belief, are we not there yet, and particularly I ask for 'advanced' economies? My answer is fueled by the theory of change that I learned from the Women's Funding Network. To create change a number of things have to happen. First the issue needs to be framed in a way that creates for awareness and engagement by the masses, both men and women. Next that framing fuels behavior change. People start to do things differently because they realize that doing so will make a difference. This behavior change works alongside or to motivate structural and institutional change, which often means laws change. That change is then protected so you don't start rolling back once forward movement is created.

Think about this in the context of the environmental movement. Folks did a great job telling us why we need to care about our planet, so we know are more likely to pick up garbage, recycle, bring our own bags to the grocery store. Laws have also changed so companies are much more accountable for their carbon footprint.

So what does this mean for advancing gender equality? Lots of things. For example lets consider the Critical Mass Principle - which is a voluntary goal to have a minimum of 30% women on all corporate boards and governmental committees and boards. The fact that diversity of background and perspective improves the quality of decision making has led some organizations seeking this balance, but of course not enough. So what we want to change, is the composition of these boards. We are working on a campaign to lift up the research and encourage companies to do this, while at the same time pushing for a possible mandatory requirement that has already been instituted in some countries. We are framing the issue, then trying to encourage to mandate behavior change.

Bottom line if YOU believe that men and women, boys and girls should have equal rights and access then what are YOU doing to help make that happen? What behaviors support YOUR beliefs and what can you do differently to be part of the change you want to see in the world? What is your social action plan? You can fill in the blank with anything you want to see different. It is one thing to believe something, it is quite another thing to be part of making that belief a reality. Go for it.

Tax Rate Expirations

"The current top capital gains rate of 15% is set to rise to 20% in 2011. Next January also heralds both the expiration of capital gains treatment for dividends, returning them to ordinary income rates, and the return of a top 39.6% income tax bracket, up from 35%. This means that for 2011, dividend income could be subject to a federal tax rate of 39.6%, and in 2013, 43.4% (top income tax bracket of 39.6% plus 3.8% investment income tax). Likewise, in 2013, capital gains may be taxed at a top rate of 23.8%. There has been movement in Congress to maintain the capital gain and dividend rates at 15% for those with incomes under $250,000 (joint return) and $200,000 (single)." WTAS

Major tax increases are coming. Major. I cannot imagine how this is going to be a positive for the equity or credit markets. I just read the top income bracket in New York City will be paying over 52% total federal, state and local. California is giving tax refunds in the form of IOUs? NY is weeks away from running out of cash. We are already in a state budget crisis. There is going to be a battle between these three taxing bodies for dollars.

Washington Visit

This was one of the coolest weeks ever with respect to the intersection of so many of the things I am passionate about! Women, money, influence, finance, social change, philanthropy, networking, human capital management and more. The only thing missing was the faith component but that is coming June 3rd. A quick plug. Auburn Theological Seminary is having their annual Women’s Lives of Commitment Breakfast at 7:30 am at the Plaza Hotel, NYC. I am humbled to be an honoree this year, with other amazing women leaders who are motivated to do what they do in the world because of their faith. Following the breakfast there will be a conversation, “Women, God and Money” so please consider joining! I will do a whole entry on Auburn soon! On to this week...

I made a trip to Washington on Wednesday to meet with the White House, Presidential Personnel Office to discuss how they can access various networks to attract the best people possible to senior roles in the administration. It was fascinating to learn about the process by which they recruit thousands of people in to various roles and I was deeply impressed with the staff people we met with. We had many senior people in the administration come to speak to us to talk about their careers and I learned so much. Personally I have never thought about a role in government so it was really eye opening. The good news is the government is hiring, the bad news, there is not much hiring going on in the private sector.

Next I had a meeting with some very senior folks at Treasury to discuss the Women in Fund Management Report, which looks at the barriers and solutions to attracting, retaining and promoting more talented women in to financial services roles. The Treasury Department is perhaps the largest financial institution we have in this country. I had never really thought about that! ( If you are a person with a financial background and are looking for work, or know of others who are, the treasury is hiring! (check out the link here) ) We discussed a variety of issues and opportunities and I looking forward to staying connected with the people I met there and assist them in any way possible! A few weeks back I had the opportunity to meet the most senior woman in Treasury, the Treasurer of the United States, Rosie Rios. I am going to do a separate entry on Ms. Rios as she is truly spectacular and I women we all need to know about. Talking about powerful women in Washington Finance, there was a great article about many of them last week on Yahoo so in case you missed it, here it is. ( "Female Sheriffs of Wall Street - click here)

So what did I learn from all of this? What were my take-aways? First, our country is being largely shaped by government, so to have the opportunity to walk the streets of Washington, and have access to the buildings and the people were decisions were being made me feel like I could be part of it all. That I could have a voice. That we all could have a voice. I shared some of the concerns I had as a resident of this country, and I was listened to. That was very cool. Second, I was deeply impressed with the people I met and their commitment to the work they do. If there are ways I can assist them in doing the best they can do for all of us, I am going to do that. Third I realize the need to see government as a partner to business. I see the need for creative solutions to some very big problems and I am left imagining how to do that. Stephanie Hanbury Brown was there from Golden Seeds, and we had a great conversation with a senior person from the Commerce department on how to breakdown the barriers to accessing capital faced by women entrepreneurs. Unleashing private capital to fund new businesses has to be an urgent priority so how do we partner in doing that? How do we leverage the power of government in partnership with the private sector to improve our economy? So far I have not seen a lot of great examples of that but I left Washington believing that good things could and will happen. So..... I left inspired. I left hopeful. I left feeling like I can, we all can, make a difference.

I have so much more to blog about but this is already a very long entry.... blessings.