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NEWS FLASH

Austerity Pushes Eurozone Unemployment To Highest Level Since Adoption Of The Euro | The Eurozone’s unemployment rate has hit 10.7 percent, according to Eurostat, the European Union’s statistics office, as several countries have adopted austerity measures that are choking economic growth. This is the highest level of unemployment since the Euro was adopted in 1999. As Bloomberg News noted yesterday, Greek austerity measures are “driving the economy deeper into a recession,” while economist Kenneth Thomas noted that “the four [European] countries that have had the most severe budget cuts have the highest unemployment rates.” As we’ve pointed out, Europe should provide a stark warning to conservatives who believe that budget cuts would be good for the U.S. economy.

How Access To Contraception Benefits The Economy

Rush Limbaugh has been on a several day long sexist tirade against Georgetown Law student Sandra Fluke, who testified before Congress on the Obama administration’s proposed rule requiring employers to provide contraception coverage in their health plans. Limbaugh’s misogynistic attacks have earned him the condemnation of 75 Democratic lawmakers and lost him the support of at least four advertisers.

Conservatives have tried to frame the debate over the contraception rule as one of religious freedom, while progressives have countered that it’s simply about women’s health. However, as New Deal 2.0′s Bryce Covert noted, providing access to contraception is also simply good economic policy:

Research consistently demonstrates a link between decreased fertility thanks to contraception and increased female employment. And right on cue, women, freed up from unwanted child bearing and child rearing, consequently flooded the workforce after the pill became widely accessible. In 1950, 18 million women were in the workforce. By the 1980s, the pill’s impact had had such an effect that 60 percent of women of reproductive age were employed. By 2000, the ranks of women in the workforce had more than tripled since the ’50s, rising to 66 million. Overall, from 1970 to 2009 women went from holding 37 percent of all jobs to almost half of them.

This change has had a significant impact on women’s lives and families, the fallout of which is still reverberating throughout the culture wars. But the impact on our economy is easy to quantify. The private sector has long recognized this fact: consulting giant McKinsey explains that without the huge increase in women’s workforce participation since the 1970s, “our economy would be 25% smaller today — an amount equal to the combined GDP of Illinois, California and New York.”

According to the Economist, since the 1970′s, “back-of-the-envelope calculations suggest that the employment of extra women has not only added more to GDP than new jobs for men but has also chipped in more than either capital investment or increased productivity.”

And then, of course, there are the health care savings that come with contraception. Nationally, every dollar spent on family planning saves $3 in Medicaid costs. According to the Guttmacher Institute, “every $1 spent on public funding for family planning saves taxpayers $3.74 in pregnancy-related costs.” When California spent $400 million on family planning services in 2002, “$1.1 billion was saved in public funds that would have been spent on medical care, income support, and social services through averting pregnancies up to age two, and $2.2 billion up to age five.”

NEWS FLASH

Hispanic Workers Face Enormous Income Gap In Every Major American City | White workers earn at least 35 percent more than Hispanics in 95 of America’s major metropolitan areas, according to an analysis by The Business Journals. Whites earn at least 50 percent more in 429 markets, regardless of size. Los Angeles is the worst major market for Hispanic workers — despite its 40 percent Hispanic population, whites earn 67.2 percent more. With an income gap of 82.5 percent, Canton, Illinois is the worst market overall. Melbourne, Florida has the smallest gap of any major market (35 percent), followed by Knoxville, Tennessee and Baton Rouge, Louisiana at 38.1 percent.

After Gutting Health And Education Funding, Idaho Advances Bill To Cut Top Tax Rate And Corporate Tax

Over the last three years, Idaho, like most states across the country, has had to slash its budget in the wake of the Great Recession. The state has gutted education and health care spending, slicing its higher education budget below 2001 levels, while cutting millions from its mental health funding.

But as the same time that they felt the need to cut funding for these important areas, Idaho Republicans managed to find tens of millions of dollars to cut the state’s top tax rate and corporate tax:

A $36 million tax cut for Idaho’s top earners is roaring through the Idaho Legislature, backed by Gov. Butch Otter and co-sponsored by a majority of the members of the Idaho House.

The move comes even as Idaho’s reeling from three years of deep budget cuts to everything from schools to Medicaid, very few of which are being restored. [...]

The bill would lower Idaho’s top individual income tax rate from 7.8 percent to 7.4 percent, and lower the corporate tax rate from 7.6 percent to 7.4 percent; that would take $35.7 million out of the state’s tax revenue stream next year and every year thereafter.

State House Tax Chairman Dennis Lake (R) opposes the bill, saying, “we are creating a structural deficit in our revenue stream that we cannot deal with, without at some time in the future raising taxes.” 20 members of the Idaho house — 12 Democrats and eight Republicans — voted against the bill.

Already, Idaho’s tax system is regressive, with its poorest residents paying a larger share of their income in taxes than its richest residents. Adding some insult to injury, Idaho’s lawmakers also decided to shoot down a bill that would have cracked on on tax dodging that is aided by internet sales companies like Amazon.

Ohio GOP Senate Candidate Wants New Plan To ‘Rescue The Auto Industry,’ But Admits Original Rescue Worked

The rescue of the American auto industry is likely to play a large role in the 2012 Ohio Senate race, where incumbent Sen. Sherrod Brown (D) will face a challenge from Ohio Treasurer Josh Mandel (R). After Michigan, Ohio has the nation’s second largest auto industry, and the success of the auto rescue has been felt by suppliers and manufacturers across the state.

Since the 2008 rescue, America’s auto industry has rebounded, adding thousands of jobs, gaining market share, and posting record profits. Perhaps Mandel has missed those facts, because at the formal announcement of his Senate campaign Thursday, he hinted that he would be proposing a new plan to “rescue the auto industry,” the Youngstown Vindicator reports:

Ohio Treasurer Josh Mandel, a Republican candidate for U.S. Senate, said he is developing a plan to “rescue the auto industry.”

When asked about the $82 billion government bailout of General Motors and Chrysler in 2009, Mandel said in a Thursday call to The Vindicator, “Our economy has not yet been rescued. So many people are still out of work.” [...]

I’m not saying the bailout didn’t work,” Mandel said.

“Mandel’s claim to be putting together a plan to rescue the industry is a laughably candid example of how completely clueless he is as to what’s going on with Ohio’s middle class and how he’ll say anything to get elected,” Brown spokesperson Justin Barasky told the Vindicator.

It’s unclear why, given the success of the original auto rescue, Mandel thinks a second is necessary. He didn’t offer any further details, only saying the “rescue” plan would be rolled out over the next six months as part of a larger manufacturing plan. He has not offered a formal position on the original auto rescue, though it was opposed by other statewide Republicans like Gov. John Kasich. His campaign did not respond to a request for details on his rescue plan, or to clarify his position on the original auto rescue.

Security

Dem Rep Urges GOP To Let Bush Tax Cuts Expire To Prevent Further Military Spending Reductions

Sen. John McCain (R-AZ) and Rep. Howard “Buck” McKeon (R-CA) have been leading the charge on Capitol Hill trying to repeal the nearly $600 billion in military and security spending cuts that are mandated to take effect because the super committee has failed to reach an agreement on how to cut $1.2 trillion in federal spending.

But House Armed Services Committee ranking member Adam Smith (D-WA) offered an easy solution to Republicans refusing to trim any more fat from the military’s bloated budget: let the Bush tax cuts expire. Smith noted the revenue generated from the elimination of those tax cuts would more than cover the $1.2 trillion in cuts Congress needs to find, DEFCON Hill reports:

He charged that if Republicans vote to extend all of the tax rates without changing sequestration, they would then be supporting keeping sequestration in place, because the revenues from the expiring tax rates could undo sequestration.

The vote to extend the Bush tax cuts in their entirety would, in essence, be the vote to lock in sequestration,” Smith said at a roundtable with reporters. “That will be interesting.”

As the Hill notes: “The reason the Bush-era tax rates and sequestration are interlinked is all about timing: The rates expire at the end of 2012, while sequestration goes into effect on Jan. 2, 2013.”

Obama’s Oil Speculation Task Force Has Met Just A ‘Handful Of Times’ Since Its Creation

With evidence that speculation had driven a rise in fuel prices last year, President Obama announced the creation of the Oil and Gas Price Fraud Working Group, which was tasked with investigating oil speculation. The task force, led by the Justice Department, was designed to prevent manipulation of the oil market and price-gouging at the gas pump.

Nearly a year after its creation, though, the task force has met “only a handful of times” and has yet to issue any public reports, McClatchy reports:

The Oil and Gas Price Fraud Working Group has met only four or five times since its creation last April 21, and most of those meetings came at the time of its inception. Back then, Obama promised that the group would “root out any cases of fraud or manipulation” and noted that its scope would include the “role of traders and speculators.”

Oil prices have begun rising again like they did before the task force was formed. A spokesperson for the Justice Department, which is leading the task force, told McClatchy that “the working group is monitoring the situation, and if we find any evidence of criminal behavior or other misconduct we will respond immediately.” The task force is also assisting the Federal Trade Commission in an investigation of American oil refiners and “conducting other, nonpublic investigations” into the oil and gas industry.

A wide range of experts pinpointed oil speculation as the cause of both the 2008 and 2010 spikes in oil prices, with evidence strong enough that Obama felt the need to create such a task force in the first place. Oil prices are again rising rapidly despite the lowest demand since 1997, and experts are again pointing to “speculative money that’s flowed into gasoline futures contracts since the beginning of the year, mostly from hedge funds and large money managers.”

As McClatchy noted, the U.S. currently has “ample oil and gasoline inventories,” suggesting that “oil and gasoline prices are disconnected from supply-and-demand market fundamentals” and are rising due to speculation. The only question now is whether the task force created to investigate such irregularities is committed to doing anything about it.

Super Tuesday States Have Some Of The Highest Underwater Mortgage Rates — Will The GOP Offer Solutions?

With the Michigan and Arizona primaries over, the focus of the GOP presidential campaign turns to Super Tuesday, during which voters in ten states (Alaska, Georgia, Idaho, Massachusetts, North Dakota, Ohio, Oklahoma, Tennessee, Vermont, and Virginia) will cast their ballots.

According to the latest data from Corelogic, some of these states are among those hardest hit by the housing crisis, with some of the highest rates of underwater mortgages (where the homeowner owes more in mortgage payments than the house is currently worth) outside of the housing crisis’ big three: Arizona, Nevada, and Florida. Here’s a quick look at the percentage of homes underwater in the worst hit Super Tuesday states:

Georgia: 33 percent (5th highest in the country)

Idaho: 25 percent

Ohio: 23.9 percent

Virginia: 23 percent

These four states all have percentages of underwater homeowners that are higher than the national rate of 22.8 percent. But so far, even as they campaigned in Arizona, Nevada, and Florida, the GOP presidential candidates have shown precious little concern for underwater homeowners, and have yet to offer a single substantive solution to the still-burning housing crisis.

Mitt Romney’s solution, for instance, is to simply let the housing market “hit bottom,” while Newt Gingrich’s is to repeal Wall St. reform. Romney even earned himself a rebuke from Nevada Republicans (including one who endorsed him) for his lack of a plan on housing.

“The easy answer to why Republican candidates don’t talk about this is they don’t have any type of solution,” said University of Nevada-Reno Professor Eric Herzik. As the campaign turns to more states still feeling the pain of the housing bubble, the candidates will have another golden opportunity to show that they actually care about keeping Americans in their homes. But we’re not holding our breath.

Econ 101: March 2, 2012

Welcome to ThinkProgress Economy’s morning link roundup. This is what we’re reading. Have you seen any interesting news? Let us know in the comments section. You can also follow ThinkProgress Economy on Twitter.

  • U.S. auto sales hit their highest annual pace in four years in February. [CNN Money]
  • 11.1 million homeowners — 22.8 percent — are underwater on their mortgages, according to the latest data. [HousingWire]
  • Eurozone leaders have refused to give Greece more than half of its €130 billion rescue package, saying Athens hasn’t met all the conditions. [Financial Times]
  • The Department of Justice is casting a “wide net” in its inquiry into the sale of home loans by the biggest banks. [Reuters]
  • Tea Party groups claim the IRS is frustrating their attempts to gain tax-exempt status. [Associated Press]
  • President Obama is citing the recent rise in gas prices as he once again calls for an end to tax breaks enjoyed by the oil industry. [The Hill]
  • 26 more states, along with the District of Columbia, have applied for waivers from No Child Left Behind. [Education Week]

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