Bailout
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G20 Countries Take On Economic Inequality and Global Poverty
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Time to Protest Yet?
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"We were poor and we're still poor"
Should We Encourage Low-Income Homeownership?
Published August 07, 2009 @ 12:00PM PT
Sociologist Dalton Conley argues yes, and now especially, given the affordability of a bottomed out market:
"the solution to our troubles is not to restrict homeownership, but to expand it...owning a home can be one of the best ways for a poor family to save and accumulate assets: recent history aside, the value of a house does typically rise, and its owner avoids paying rent and gets a tax break."
I've gotta be honest with you, I'm extremely wary of this argument. At a most base level, and this shows you how far I've moved back to the left since entering MIT in 2004, when I would have supported Conley's argument 100%, there's an argument to be made for providing more affordable, safe, rental housing as a basic good in society, not just as a sorry, second-class substitute for homeownership. And it's the argument for rental housing that seems especially timely to me. Secondly, homeownership has a lot of additional costs beyond renting, that without a better all round safety net to gird low-income homeowners, I fear would undermine the assumed economic security and gain homeownership offers.
Subsistence is the Only Choice
Published July 29, 2009 @ 11:00AM PT
Monday's post about the lack of housing affordability for anyone working minimum wage struck a chord with many readers; to date, it's driven the most readers to this blog. I noticed that after folks read it, they tended to root around in our Actions to see what they could do. There's a lot of options, but here's a couple suggestions:
- Join a campaign for a Living Wage;
- Join a coalition of affordable housing advocates to push for more quality housing for low-income Americans, especially for families, the elderly and the disabled;
- Fight for welfare "reforms" that count higher education towards work and expand access to subsidized childcare and for longer periods of time. (There's actually a lot more that could be done, but I'm trying to keep you all focused.)
Talking about poverty day in and day out can get pretty debilitating - I can't imagine how it is for my readers and loved ones who live it everyday. I'm feeling particularly beat down this morning by the combination of this absolutely horrendous report of the tragic confluence of child poverty, tenant exploitation and substandard housing from New Orleans, as well as the insistence from many readers around the web that minimum wage is generous enough - that if immigrants can get by, why can't we; that it will make teen workers more irresponsible, that it will hurt the businesses too meager or cheap or profit-oriented to even pay benefits. Bull. Bull. And more bull.
Goldman Sachs Owns You
Published July 03, 2009 @ 12:00PM PT
Matt Taibbi in Rolling Stone has a frightening takedown of the investment bank:
Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling themselves as men above greed, just a bunch of really smart guys keeping the wheels greased. They've been pulling this same stunt over and over since the 1920s — and now they're preparing to do it again, creating what may be the biggest and most audacious bubble yet.
Consider it your weekend reading as we celebrate Independence Day - freedom from Britain, not our corporate overlords, apparently.
In this patriotic spirit, Zero Hedge is looking for whistleblowers "to provide information they believe captures wrongdoing in the financial system - in the absence of objective, unbiased and fair external regulators, it is the responsibility of everyone, but most notably insiders, to cleanse the system." They will collect and sort the info and forward it on to the FBI and Attorneys General.
A way to channel our rage and anxiety over the latest, absolutely horrendous jobs report, no doubt. Did you know we're on track to erase ALL job gains since 1999? When Bush spoke of our "ownership society," we mistakenly thought we owned the place. The joke, painfully, is on us.
In light of our jobless recovery, Krugman wastes no time in asking for another stimulus.
Earlier this week: Bank of America accused of exploiting Latin@ customers.
(Photo of Goldman Sachs in Lower Manhattan by Spoon Monkey)
Obama's financial regulation plan more weak tea
Published June 19, 2009 @ 12:00PM PT
(Paul Krugman and Diane Casey-Landry on the Newshour)
There's a ton of great analysis out there on Obama's financial regulation plan. What I'm reading suggests a concensus that the plan does not go far enough. Bad news for Obama, especially as confidence in him slips to rectify our economy and bring us affordable healthcare. What's so frustrating about this is that President Obama enjoys a very high overall approval rating. I think Joe Nocera is right (h/t):
“If Mr. Obama hopes to create a regulatory environment that stands for another six decades, he is going to have to do what Roosevelt did once upon a time. He is going to have make some bankers mad.”
This President of ours is not interested in upsetting any of the power players. Women, LGBTs, Fox News watchers, no problem. Bankers, lobbyists, Congress, not so much. Anyway, on to the meat of the proposal - what's good, and what's not-so-good.
Should California Get a Federal Bailout?
Published June 17, 2009 @ 12:00PM PT
The Obama Administration says no. Although California's economy is bigger than Canada's or Brazil's, it's "too big to fail" argument was rejected by the federal government.
Clearly Obama et al. have not been paying attention like we have to the shenanigans behind the teetering of the world's 8th largest economy. Either that or piling the woes on the backs of the poor ain't no big thing to the folks in DC:
While its fiscal crisis is severe, experts say the state is unlikely to default on what it owes, even if it runs out of cash. It can raise money through taxes and other means to assure repayment of its debt. Most likely are massive cuts in public services.
My emphases. You know, wevs.
But honestly, I'm trying to figure out exactly what parameters the govt is using to decide who gets a bailout vs. who doesn't (I know, aren't we all). Calculated Risk (1st link) says it's California's fault - they got drunk on the housing bubbly and are now too dysfunctional and hungover to deserve a bailout. Contrast that to Michigan, on an economic lifeline for decades now and newly the recipient of a $2B bond program for its public and private sectors.
Two states with Depression-Era unemployment in some places. For now, California continues to twist in the wind. (I should probably have come up with a catchy earthquake-y metaphor here...)
(Photo of the State Capitol in California by Kevin Krejci. Note the flags at half mast. For its economy?)
Obama to Announce Financial System Overhaul
Published June 16, 2009 @ 09:00AM PT
Later this week, President Obama will lay out a comprehensive plan to overhaul our nation's financial system. Will it deliver the vast regulation and reform we need to control the excessive risk-taking of the last decade? Will it curb irresponsible, freewheeling lending? Or will it be anemic or a non-starter, like a few too many of his big plans?
Treasury Secretary and Guy-With-Too-Much-Power economic advisor Larry Summers give us a sneak peak of what to expect:
- To stabilize the whole "system," capital and liquidity requirements for individual banks will go up, interconnected banks will be under "consolidated supervision" by the Fed, a "council of regulators" will keep an eye on the system.
- Originators of securitizations will have to retain a financial stake, credit agencies will no longer be as influential, and asset-backed securities will come with stricter reporting requirements. Derivatives will be regulated by people who can actually "enforce" the rules.
- This one concerning predatory lending may be the most vague, or maybe just the most vague using the least fancy terms. Either way, it's worrisome for the majority of us: "the administration will offer a stronger framework for consumer and investor protection across the board."
- Wait, this one's real vague too. Either Geithner and Summers ran out of steam, WaPo edited this, or they're really just thinking out loud on these. Concerning all the bailouts by the Fed, this will cease, to be replaced by "a resolution mechanism that allows for the orderly resolution of any financial holding company whose failure might threaten the stability of the financial system. This authority will be available only in extraordinary circumstances, but it will help ensure that the government is no longer forced to choose between bailouts and financial collapse." Didn't Paulson get down on one knee last fall begging Congress to take "extraordinary" measures?
- "We will lead the effort to improve regulation and supervision around the world." Because our credibility is strong. Good plan!
/snark.
Seriously though, what do you expect and what do you hope to hear? Let's stay tuned, shall we?
(Obama and his Economic Team, Press Conference from the Obama-Biden Transition Project)
Being Broke
Published June 07, 2009 @ 09:05AM PT
And so, as I try to put the furniture back where it was, and wake up a couple of sleeping party guests, we can return this site to Leigh pretty much as we found it (along with a note promising to replace the broken lamp). Since Greg and Diane and I couldn't apparently solve the poverty problem in a week, there will still be plenty for Red to write about.
Just to get Leigh started, I'll hand it back to her with a pressing issue Diane touched on yesterday - the growing sense that our economic crisis has become a state-level problem, bankrupting state budgets, and causing them to cut services... often to the neediest populations, at just the worst moment.
