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Seneca: Latinos and the Current Ship of State

March 2nd, 2009 · 14 Comments

President Obama has entered office and confirmed that the nation faces its greatest economic challenge since the 1930′s Great Depression. The menacing economic syndrome of deflation is rearing its ugly head. Prices are collapsing in many markets not just in housing. The current crisis is increasingly characterized as becoming a wide-spread debacle: the consumer confidence is shattered, the financial system is plainly unraveling, and now international trade is going south in a significant way.

One of the most troubling indicators is the rapid rise in the unemployment rates. In some states, like Michigan, Rhode Island, and California, it is already over 10% unemployment. Many of the country’s top economic analysts predict that the worst is yet to come. President Obama is using a lot of political capital in the so-called ‘stimulus bills’. Yet many economic pundits are noting that the new Administration must try every means to stem the increasing economic threats. Hence, stimulus bills may be a shot in the dark, but most reasonable people submit that it is better than doing nothing.

When one begins to consider the Latino plight in this dire economic situation, it becomes clear that both US Latino citizens and immigrant Latinos are feeling the pangs of this crisis like all other groups. But the real challenge is that even when the times were good, our socio-economic indicators demonstrated that we were fast becoming the underclass in many categories. These indicators included: highest school drop-out rates, higher than average unemployment rates and suggestions of a definite high under-employment rate (informal economy), poverty levels, increasing teenage pregnancies, other health concerns have become alarming with growing obesity and diabetes rates. Yet it can be easily demonstrated that the Latino community has progressed notably in the last two generations: home-ownership increased, two family incomes are increasingly common, vastly increased numbers of college and university graduates, many more small Latino businesses have flourished, infinitely more Latino elected officials at every level and infant mortality figures have dropped. Now this current economic crisis will be equally devastating to both poor and more affluent Latinos. The challenge is how to get our Latino community engaged in the serious discussion of actionable proposals that affect directly the livelihood of the Hispanic population.

The fact that three trillion dollars may be spent on rescuing our economic well-being is almost unfathomable; yet the Latino community needs its Washington leadership in Congress and the Administration to engage full force to make certain that these gargantuan spending bills provide some cover to the Latino community. This must become the primordial concern on the national Latino agenda.

Hispanic Congress-persons on the Appropriations Committee like Jose Serrano, Ed Pastor, Lucille Roybal-Allard and Ciro Rodriguez are in strategic positions to lead the dialogue within the community. Senators like Bob Menendez and Mel Martinez, who are both on the Banking and the Energy Committees, are also key to any effort for Latinos. Senator Menendez is also on Budget Committee. Nydia Velazquez is well-positioned as Chair of the Small Business Committee; and like Luis Gutierrez, Joe Baca, Ruben Hinojosa and Albio Sires, Velazquez is also a member of the Financial Services Committee. Loretta Sanchez has notably served in the powerful Joint Economic Committee of Congress as the only Hispanic and hopefully continues to be an active member. Mario Diaz-Balart even though a minority member serves on three powerful committees: Budget, Science and Technology and Transportation and Infrastructure. Xavier Becerra’s membership on the Budget Committee and the powerful Ways and Means Committee suggest perhaps that he is the lead on this urgent economic discussion affecting the Latino community. Taking up Hispanic educational challenges on Committee on Education and Labor would include Hinojosa, Raul Grijalva and Linda Sanchez. Charlie Gonzalez remains on the influential Committee on Energy and Commerce which oversees the Health care coverage, telecommunications and trade issues. Lastly, the Hispanic members of the important Agriculture Committee taking up the national nutrition issues in the country include Joe Baca (chair of Sub-Committee on Nutrition,) John Salazar and Henry Cuellar. These Congress people mentioned are key in this massive stimulus spending process.

Moreover, Hilda Solis, as Labor Secretary, should take up the mantle as the lead Hispanic in the Administration to ensure that our community gets a fair shake in the recovery efforts being put forth. Solis along with Cecilia Munoz, the Assistant to President Obama for Inter-Governmental Affairs must quickly master the intricacies of the OMB (Office of Management and Budget) process in the White House. OMB is the spending  or allocating traffic cop in any administration and has powerful authorities to determine the amounts and who gets the monies and  how they should be spent within the legislative language provided.

The Hispanic advocacy groups like National Council of La Raza, LULAC, the Cuban National Council, the National Puerto Rican Foundation and other Latino national and regional or local advocacy organizations must insist on action. The Hispanic Caucus should immediately form if it has not yet a structured working group within its organization to identify the Latino community needs in this economic crisis, the monies available, the mechanisms involved, and communicating the intricacies of the processes to the local governmental level. Nydia Velazquez the new Caucus Chair should move swiftly to ensure that the Latino representation is effectively felt and that the constituencies’ needs be addressed. A multi-trillion dollar spending program must include the basic and necessary resources for the Latino community to alleviate the impending hardships. A national discussion and consultation process among the Latino community is imperative to provide a better understanding of the deepening recession (for some) and depression (for others). These are extraordinary times, and the Latino leadership must step up to the challenge in an organized and effective manner.

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Tags: Barack Obama · Congressional Hispanic Caucus · Congressman Joe Baca · Economics · Education · LULAC · National Council of La Raza · Rep. Albio Sires · Rep. Charles A. Gonzalez · Rep. Ciro Rodriguez · Rep. Ed Pastor · Rep. Henry Cuellar · Rep. John Salazar · Rep. Jose Serrano · Rep. Linda Sanchez · Rep. Loretta Sanchez · Rep. Luis Gutierrez · Rep. Mario Diaz Balart · Rep. Nydia Velazquez · Rep. Raul Grijalva · Rep. Ruben Hinojosa · Rep. Xavier Becerra · Secretary of Labor Hilda Solis · Sen. Mel Martinez · Sen. Robert Menendez · Seneca · teen pregnancy

14 responses so far ↓

  • 1 Anna // Mar 2, 2009 at 7:55 pm

    Re: “Now this current economic will be equally devastating to both poor and more affluent Latinos.”

    No, it won’t. Where are you getting that?

  • 2 india blanca // Mar 2, 2009 at 8:12 pm

    OK…Anna enlighten us, how is it that Latinos will not be affected? …wouldn’t be great if that were true but I cannot imagine how you figure we will escape this tragic economic crisis….Seneca once again attempts to make us aware of what we should expect and demand from our public officials and I for one am thankful that he can keep shining such an insightful light for our community.

  • 3 losangelessoldadera // Mar 2, 2009 at 9:01 pm

    I am also curious to know why Anna thinks that the more affluent Latinos will not be impacted by the current economic crisis. I personally know of “affluent Latinos”/business owners/PhDs who are indelibly feeling the consequences of this economic downturn.

  • 4 webmaster // Mar 2, 2009 at 9:40 pm

    Seneca: “Now this current economic crisis will be equally devastating to both poor and more affluent Latinos. The challenge is how to get our Latino community engaged in the serious discussion of actionable proposals that affect directly the livelihood of the Hispanic population.”

    Seneca is correct that the crisis is devastating to both the poor and more affluent Latinos, although the more resourceful will probably be able to weather the storm better than those who are indigent. I also know many Latinos with degrees, homes in nice neighborhoods, etc., and we are all being extra cautious with our purchases. Obviously, when you have more, you stand to lose more. Losangelessoldadera’s observations are similar to my own.

    This blog post provides some substantive suggestions for our federal officials. I hope that the Congressional Hispanic Caucus is taking the actions recommended in the final paragraph of this blog post.

  • 5 Anna // Mar 2, 2009 at 10:59 pm

    India Blanca: I didn”t say that Latinos would not be affected.

    I question the notion that this crisis would be equally devastating to rich and poor Latinos. That’s preposterous.

    People who are truly wealthy, who own their own home (mortgage paid off) and who have savings, not just stock, and who aren’t just living on credit, are not going to experience the same level of devastation as the poor.

  • 6 Prof. Samuel D. Bornstein // Mar 3, 2009 at 6:21 am

    I want to point out a very significant concern for the Latino community.

    There is concern for Latino borrowers who fell prey to Subprime Lending Abuses and are at-risk of suffering the lose of their homes to foreclosure. I wish to express concern for the many Latino Small Business Owners who will not only lose their homes to foreclosure, but also their businesses. This will result in Job Losses in the Latino community.

    The Wall Street Journal article quoted Rep. Joe Baca’s concern that Hispanics will be hit hard by foreclosures. “Housing Push for Hispanics
    Spawns Wave of Foreclosures” .

    There is another important fact that should not be overlooked. Hispanics had the largest increase in Self-Employed Small Business ownership. Furthermore, California, Florida, and Texas had the largest concentration of “Toxic” mortgages. My concern is that Hispanic small business owners will be part of the foreclosure problem. As they suffer the lose of their homes, their small businesses may fail which will result in millions of lost jobs.

    The foreclosures will not only come from individual borrowers, they will come from small business owners who fell prey to the “toxic” mortgages that will be resetting in 2009. These foreclosures will further exacerbate the stresses on these small businesses that may fail. The
    result will be a spike in unemployment and job loss.

    On December 14, 2008, CBS’s “60 Minutes” had a segment on the 2nd Wave of Foreclosures. They indicated that experts were expecting another wave of mortgage defaults on ALT-A and Option ARMs mortgages which will dwarf
    the Subprime Mortgage Crisis. CBS MISSED A VERY IMPORTANT FACT!

    Many fail to realize that there are millions of self-employed smaller businesses, who employ from 1-10 employees, that are holding the
    mortgages that are going to reset in 2009 through 2012. These borrowers are Prime and Near-Prime borrowers who hold ALT-A, Option ARMs, Interest-Only mortgages. There are $1 Trillion ALT-As, and $500-600 Billion Option ARMs.

    So, here we have a major problem… Not only will these small business owners lose their homes, but there will be the resulting JOB LOSSES on their business failure. Note, although President Obama is stressing the need to create 3 million new jobs, we must understand …
    “JOB RETENTION IS AS IMPORTANT AS JOB CREATION”.

    I authored a survey which was conducted by the National Association for the Self-Employed (NASE) to its national membership. The NASE Survey disclosed disturbing facts. The NASE survey is at http://advocacy.nase.org/research.asp
    Please read my Commentary.

    According to this survey, it is estimated that 3,709,800 small business owners hold Alt-A and other toxic mortgages, and 1,279,800 are already delinquent as they have missed one to three or more monthly mortgage payments at mid-November, before the expected Resets that are scheduled to begin in 4th Quarter 2008 through 2012.

    The solution lies in the hands of Congress. Congress should take note of this survey and be “proactive” in addressing the situation, rather than “reactive” as the case has been in the Subprime Mortgage Crisis.

    We can’t afford another shock to our economic system at this time. This 2nd Wave of Foreclosures which will be caused by the ALT-A and Option ARMs will not only result in Foreclosures, but also Job Loss.

    I welcome discussion and bringing this to the attention of Rep. Velazquez of the House Small Business Committee and Sen. Menendez of the Senate Banking Committee. They are our best spokespeople who can address a “proactive” solution before it is too late.

    Thank you,

    Samuel D. Bornstein
    Professor of Accounting & Taxation
    Kean University, School of Business, Union, NJ
    Tel: (732) 493 – 4799
    Email: bornsteinsong@aol.com

  • 7 Anna // Mar 3, 2009 at 5:04 pm

    Thank you for this information.

  • 8 Reyfeo // Mar 3, 2009 at 7:54 pm

    Nice input Porfessor!

    First I agree with “JOB RETENTION IS AS IMPORTANT AS JOB CREATION”. Try telling this to Obama who thinks re-building infrastrure (roads, bridges, contruction if you will, etc) will be a “retainable” area of job creations. Sure it’ll boost the economy for a while, but what happens when we finish rebuilding? Will these jobs be around after 2 or 3 years? My guess is probably not…Besides my theory here is (and i’m very curious to see what categories these small business you talk about fall into) illigal immigrants will be employed to do this type of work (contruction: a big part of this “stimulus” bill) once again leaving the American worker out in the cold (check the stats, Latinos make the bulk of contruction workers)

    I wonder what Americans will do when the times get so tough that we actually finally decide to send these people back to thier countries because we need these jobs to sustain ourselves. Then and only then will we get a clue about creating “retainable” jobs that Americans should not have to fight illigals for.

    I dissagree with your notion that “There is concern for Latino borrowers who fell prey to Subprime Lending Abuses and are at-risk of suffering the lose of their homes to foreclosure.”

    Not that I don’t agree Latinos are going to lose thier homes, but disagree that they fell fell prey to anything. I’m a little tired of hearing people say that many “fell prey” to anything. The reality sir, is that we are all grown ups, Latinos, Anglo, Black white, yellow, don’t matter, if you are stupid enough to not read the find print and truly belive that your “interest only/2, 3 or 5 yr ARM” was never going to catch (with that half million dollar mortgage you couldn’t afford) up with you then you probably are going to get what you deserve. See Professor, some us do take responsibilty for ourselves and believe in the good ol’ US of A way of doing business.

    Don’t worry, Anna will chime in and tell me to turn off Fox News or something crazy like that. Don’t matter, many of us were thought well by parents to not fall “prey” to anything.

    You see the “Small business owners” who “were drawn into these mortgages to quench their continuous need for capital and prompted easy access to cash” should have known better, and probably got that tingling in their guts that told not to refi and or buy beyond thier budgets, but they did.

    And lastly, “but there will be the resulting JOB LOSSES on their business failure.” Sure professor and Obama isn’t going to help those small business who make over $250K. His tax plan is only going to make this worse.

    Thank you for your input.

  • 9 Anna // Mar 3, 2009 at 11:30 pm

    I kind of agree with what you say about the construction jobs. They will probably be temporary, but they want to give the economy a boost by circulating money. I don’t think illegal immigrants will get any of these jobs. They only get hired when the economy is good. I know you don’t care about these people, and that you have been brainwashed by Fox to think they are subhuman, but they are human beings and it must be awful to be trapped between two countries and still not be allowed to work. What a nightmare. Some international human rights group needs to pressure both governments to fix this problem.

    It seems like the government should diversify how the stimulus money is spent. Everything seems to be going to the contruction industry. For instance, credit to small businesses that are in a position to create permanent jobs seems like a good idea. Anyway, I hope Obama’s handlers know what they’re doing.

    As for what you say about the loans, many people were told that they could refinance when the loan was scheduled ro reset. Most people do not expect to be swindled when they go to the bank. How were they supposed to know that anything was wrong? We used to have regulations that prevented this sort of thing, but now we’re dealing with third world standards where the banks and God knows who else can rip you off and get away with it.

  • 10 ERocha // Mar 4, 2009 at 3:00 pm

    The undocumented will get deported, that is the ebb and flow of our immigration policy and it has been through out our history. Just Google “mass deportation+history”.

    Some people need to do a little research on how marketing works and how people can fall prey to anything. Look up Seth Godin and read his book Tribes: We Need You to Lead Us

    Thank you for your input Dr. Bornstein, I will be blogging about this soon. 3,709,800 small business owners holding Alt-A and other toxic mortgages, that is a story that should be flying under the radar.

  • 11 SDChe // Mar 9, 2009 at 5:27 pm

    Anna said:
    “I know you don’t care about these people, and that you have been brainwashed by Fox to think they are subhuman, but they are human beings and it must be awful to be trapped between two countries and still not be allowed to work.”

    Anna, you are not thinking logically. When you state that someone doesn’t care about “these people”, you imply that an American concerned with the negative externalities that we are seeing from mass illegal immigration, is somehow callous and heartless for wanting a control on the immigration problem. Really think about your claim to pathos in you statement in order to have a solid argument for illegal immigration.

    Americans can empathize with illegals coming into the country, but it has been a long time coming that they are tolerating it less and less. What they don’t understand is why it’s America’s responsibility to provide the illegals the things that their own government should provide, ie; jobs, social services,public education? That is what it comes down to. Please don’t mention about how you feel Fox News is “brainwashing” people and inciting hate. Questioning why foreign countries aren’t taking care of their own citizens is a legitimate concern and observation because it does affect Americans directly.

    You also said:
    “What a nightmare. Some international human rights group needs to pressure both governments to fix this problem.”

    You are half right. Countries should be pressured to fix the mass illegal immigration problem. But America should not HAVE to fix anything. There are immigration laws that are in place already. It is, lets use Mexico for example, Mexico’s problem about why it’s citizens are leaving at an alarming rate.
    As a Mexican expat myself, it saddens me that Mexico will never reach it’s potential. It’s government for the most part will always be greedy, poverty levels will always be low, it’s rich natural resources will never be max optimized because any profit will go to the corrupt government. Mexico will forever be a third world country. It will always keep it’s citizens poor, ignorant,in fear and defenseless. Thank the Good Lord for the Second Amendment here in America.

    Long story short. Mexico and most of the Latin American countries that see a mass exodus of it’s citizens need to fix their own government. Sadly i doubt that will never happen. It is not America’s fault that their own government is not caring for them.

  • 12 Anna // Mar 9, 2009 at 6:12 pm

    There is nothing wrong with objecting to illegal immigration. And you say that I am not thinking logically. That’s funny because when have you ever seen a logical conversation about illegal immigration? The media purposely cloud the issue and illegal immigrant bashing becomes a pretext for Latino bashing.

    What bothers me most about this subject is that the real reasons that immigration has increased so much since the early 90s is never discussed. The reason is NAFTA.

    Our own government has contributed to the reasons that many Mexicans and Latin Americans have to leave their own countries. Yes, these regions have always been poor, but now it’s becoming impossible for many people to feed themselves and their families because they cannot compete with cheap subsidized crops flooding their markets because of NAFTA. They can’t live with polluted ground water and soil. Under NAFTA it’s illegal for the Mexican government to tax corporations or put any environmental restraints on them whatsoever. Corporations are legally allowed to pollute there. And let’s not even get into the war on drugs.
    Yes, Mexico needs to change, and the first change needs to get out from under US control and elect a liberal. Our government supports the Mexican ruling class. I thought Obama was going to renegotiate NAFTA? Oh yeah, he just said that to win. The US intervenes in both Mexico and Colombia and both of those countries suffer from terrible trade deals and drug violence.

    So let’s have a discussion about illegal immigration that includes all of this information.

  • 13 SDChe // Mar 10, 2009 at 2:57 pm

    My point exactly. If the main talking point from latinos regarding immigration is Fox News this and Republicans that, or racism this, we will never move towards finding an agreeable solution. If not latinos will always appear foolish when seeking immigration policy reform. Mexico did get the short end of the stick with NAFTA, both Democrats and Republicans are at fault for this one. Not one party is innocent. And even today both parties are divided over it. It is not a political party induced problem. It’s a policy problem.

  • 14 Anna // Mar 10, 2009 at 4:08 pm

    The people of this country are not divided over NAFTA. The majority hate it. That’s the root of the immigration problem. Legalization won’t solve the long term root cause.

    Truthfully, I don’t really see things improving. Our current President isn’t exactly bold. All of that during the primaries was just staging and the creation of the bandwagon effect. His administration is just a fusion of the Bush and Clinton Administrations. He didn’t seek out any new talent.

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