TPM Cafe: Opinion

Jason is right to note the discussion at American Prospect about the condition of the middle class. But don’t miss the discussion at the Democratic Strategist either. Some very interesting posts at the intersections of politics and the economy.

I don’t think of myself as politically savvy, but I couldn’t resist wading into this debate. My second post goes up Thursday morning.

Do you think that if you don’t have any past due bills that you won’t have to deal with abusive debt collectors? Think again. Walter Robinson and Beth Healy of the Boston Globe are back this morning, following up on their terrific four-part series on debt collection. The Globe has more stories about how debtor collectors harass people, but this story should tip over everyone’s cereal bowls. It is about how collectors pound — and keep pounding — on the wrong people. Are you next?

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A battle is shaping up in Congress that will have a profound effect on military personnel, and the biggest, best-funded guns are aimed directly at our fighting troops. The military is asking Congress to outlaw a practice that it says undermines military readiness, harms the morale of troops and their families, and add to the cost of fielding an all-volunteer fighting force.

The practice? Predatory lending. Specifically payday lenders that charge 400-800% interest for loans directly targeted at military families.

The plan? A cap on interest rates for military families.Â

What are the big guns on the other side? The very profitable payday lending companies, backed up by their powerful lobbying forces. They may have some allies in the form of the American Bankers Association; their group is worried that proposed legislation will cover high-priced credit cards and other consumer loans.

Will the military, led by Senators Jim Talent (R-Mo) and Bill Nelson (D-Fl), prevail? Or will the heavy lobbying assault from the industry win out?

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Jeffrey Birnbaum and Chris Cillizza say in this morning’s Washington Post that the Soccer Moms or Security Moms that every politician tried to woo in past elections have been replaced by the Mortgage Moms. These are the women who understand the squeeze on middle class families’ rising costs for housing, health insurance and childcare that can’t be covered by stagnant wages. And these are the moms who will vote for someone who connects on those issues.

If Birnbaum and Cillizza are right, then the debate over on the Democratic Strategist is critical. That’s where Kim, Solomon and Kessler are arguing that Democrats should give the family economic news an optimistic spin so they will sound, uh, optimistic and thus appeal to the masses of Mortgage Moms. By comparison, folks like me who talk about the pressures on the middle class sound like the love-child of Casandra and Eeyore.

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The New York Times analysis of census data had a quick blip about health insurance: the number of uninsured increased by 1.3 million from 2004 to 2005. People on the lowest economic rung had already been going naked that is, living without health insurance. The new 1.3 million represents a continuing expansion of middle class people who can’t afford health insurance.

Newsweek reporter Karen Springen and I had blunt conversation about the economics of health care for the middle class. Perhaps I should have suggested we give up on the term middle class, and divide America into the Insured Class and the Uninsured Class.

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Census Reports Slight Increase in Incomes, said the headline in Rick Lyman’s front-page story in the New York Times today. Bush officials smile even wider, with a spokeswoman for Bill Frist saying the data show the economy remains strong.

A few alternative headlines would have captured the data better: Families get ahead only by working more:

Same work, less money

5.9% decline in families’ incomes since 1999

One-Earner Families Squeezed Harder

Number of Uninsured Increase 1.3 million 2004-2005

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Newsweek Online ran a strong story today about the impact of medical problems on financial health. It began with 12-year-old Candace Jackson who has $90,000 of medical bills not covered by insurance. Last week on Warren Reports Matthew King‘s mom worried about running up against the lifetime caps on their health insurance, with $1.5 million in medical bills so far, and multiple surgeries in the future.

Candace and Matthew are today’s headliners, but one in every five families in America is dealing with unpaid medical bills. The see the abyss.

So I have to ask: How many more Matthews and Candaces and millions of other children and their parents and grandparents will have to go flat busted over health care before someone leads us to real change? How many will have to lose their homes? How many will have to file for bankruptcy? How many will have to wake up in the night sick with fear that they can’t pay both the phone bill and the doctor bill?

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This summer New York legislature passed a straightforward piece of legislation to help consumers: credit card companies would be banned from using universal default clauses. This would have put New York in the forefront at striking back at one of the credit industry’s most profitable tactics charging more whenever the company thinks you’ll have nowhere else to go.

Governor Pataki just vetoed the bill.

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I crunch numbers and take surveys and read fed reports until my eyes cross. But sometimes I lay it all aside in the recognition that someone who lives the middle class struggle can tell the story better than I can.

Terri King sent me this email, which I reproduce with her permission, word for word:

I just read an article written by Elizabeth Warren re: Medical Bankruptcies.. and it scared me to death.

I am the mother of a 15 month old baby boy born 2 months premature w/ a rare four fold heart defect. He spent 6 months of his life in the ICU’s of a hospital here in Las Vegas and Stanford in California. He has had 2 open heart surgeries and will need more throughout his life. Due to the horrific costs of his medical care, 1.9 million had been paid out by our insurance company by the time he was 10 months old.

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The Boston Globe series on the dark underbelly of debt was terrific, journalism at its best and most effective. Now the question is whether their expose will be a tsk-tsk moment, and then everyone will forget. Or will others seize on this moment and make it the impetus for real change?

This morning the Globe gave a first, hopeful answer. Carol Kenner, former Chief Judge of the Bankruptcy Court of Massachusetts, published an op-ed laying out five sensible changes that could go a long way toward ending the worst abuses demonstrated by the Globe series.

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Want to contribute to TPM Cafe? Email ideas for your pieces to us at talk@talkingpointsmemo.com

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