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GOP Warns That CFPA Creates A ‘Czar For Financial Services Product Approval’

By Pat Garofalo on Oct 15, 2009 at 6:18 pm

Today, the House Financial Services Committee began to debate the legislation that would create a new Consumer Financial Protection Agency (CFPA). Predictably, Republicans — who are staunchly opposed to the agency — broke out their false arguments about the agency restricting credit and eliminating jobs, but they also decided to tap into some of the GOP-generated “czar” hysteria by claiming that the CFPA’s director will be a “financial product approval czar”:

Rep. Jeb Hensarling (R-TX): [Consumers] have to go on bended-knee to this new federal czar for financial services product approval and beg that they can have a credit card or a mortgage.

Rep. Spencer Bachus (R-AL): The legislation gives this new agency and it’s czar-like chairman power to impose both fees and taxes on all financial products, which they broadly design.

Watch it:

First, like so many of the “czars,” the CFPA’s Director would be appointed by the President, but then confirmed by the Senate. Here’s the pertinent text in the bill (Section 112, page 20):

cfpabill

But more importantly, the point of the agency is not to approve mortgages or credit cards for individuals. The CFPA Director will not pull up John Smith’s credit report and decide whether or not he can have a Visa. Much like the Credit Cardholder’s Bill of Rights that was signed into law earlier this year (which placed outright bans on certain unfair practices), the CFPA will be able to ban products deemed deceptive or predatory.

For instance, as Federal Reserve Chairman Ben Bernanke advocated, no-doc loans (in which mortgages are given to consumers without any documentation supporting incomes or assets) should be done away with. Ditto for pay-day loans that have interest rates that climb to 400 percent or signing up consumers for exorbitant overdraft protection without actually telling them.

And of course, a lot of the subprime lending that led to the housing bubble — essentially the kind of lending that “occurs when the lender’s business model is based on making profits based on fees and defaults, not on the normal performance of a loan” — should be banned, as they have no legitimate purpose other than driving profits for mortgage lenders at the expense of borrowers. I’m willing to bet that their aren’t many homeowners who will be saddened to find that they can no longer access loans which result in them owing more on their house five years into their mortgage, despite making monthly payments. But that’s exactly what the GOP is advocating for.

Climate Progress

Blog Action Day: Is The CBO Trying To Kill Humanity?

By Brad Johnson on Oct 15, 2009 at 4:08 pm

Today is Blog Action Day, with thousands of blogs discussing global warming.

Doug Elmendorf
Doug Elmendorf, CBO

Yesterday, Doug Elmendorf, the director of the Congressional Budget Office, testified before the Senate energy committee about the “comparatively modest” cost of a cap-and-trade system to limit carbon pollution. The Washington Post and Wall Street Journal blared “Congressional Budget Chief Says Climate Bill Would Cost Jobs” and “Cap-and-Trade Would Slow Economy, CBO Chief Says.” Conservatives leapt on the reports to cheer the “end” of “cap-and-tax.”

Of course, Elmendorf’s testimony is nothing new. Elmendorf warned that jobs in the fossil fuel industry would be lost, and that overall GDP growth would be slowed by less than one percent by 2020. No one is arguing that there won’t be a shift from pollution-based industries to clean-energy industries. But doing so will create millions more jobs than are lost, as energy companies invest in American workers instead of foreign oil and mountaintop removal. The effect on GDP is within the margin of error of future estimates of growth. Even pessimistic studies by the National Association of Manufacturers find that U.S. GDP will increase by $9 trillion with limits on carbon pollution.

What upset me, however, was the portion of Elmendorf’s testimony that was not reported. Although he recognized that his estimates do not take into account the economic impacts of climate change, he testified that the changes that scientists call “catastrophic” would be barely noticeable in the U.S. economy:

Most of the economy involves activities that are not likely to be directly affected by changes in climate. Moreover, researchers generally expect the growth in the U.S. economy over the coming century to be concentrated in sectors — such as information technology and medical care — that are relatively insulated from climate effects. Damages are therefore likely to be a smaller share of the future economy than they would be if they occurred today. As a consequence, a relatively pessimistic estimate for the loss in projected real gross domestic product is about 3 percent for warming of about 7° Fahrenheit (F) by 2100. [Dale W. Jorgenson et al., 2004]

Elmendorf goes on to cite Nordhaus & Boyer (2000) to claim “the risk of catastrophic outcomes associated with about 11°F of warming by 2100″ gives a projected “loss equivalent to about 5 percent of U.S. output and, because of substantially larger losses in a number of other countries, a loss of about 10 percent of global output.” (By way of comparison, US GDP collapsed by nearly 50 percent during the Great Depression.)

This is frighteningly nonsensical. The CBO is arguing that the collapse of the national electricity grid, water supply, food system, and physical infrastructure from heat waves, desertification, disease outbreaks, wildfires, floods, and catastrophic storms would barely affect the national economy. In fact, seven to 11° F (4 to 6°C) warming would lead to unimaginable changes in our planet by 2100: Read more

Fox News Adopts The GOP Mantra: ‘Where Are The Jobs?’

By Pat Garofalo on Oct 15, 2009 at 12:30 pm

Earlier this month, White House Communications Director Anita Dunn commented that Fox News is “opinion journalism masquerading as news.” She then defended those remarks on CNN’s Reliable Sources, saying that “the reality of it is that Fox News often operates as either the research arm or the communications arm of the Republican Party. And it’s not ideological.” “What I think is fair to say about Fox is — and certainly the way we view it — is that it really is more of a wing of the Republican Party,” Dunn added.

Of course, the network has pushed back on Dunn’s assertions, arguing that “its news hours — 9 a.m. to 4 p.m. and 6 to 8 p.m. on weekdays — are objective.” Fox Political Analyst Brit Hume added that “if Fox News really were a GOP mouthpiece, the White House would not be attacking it.”

However, Fox’s “objective” news hosts have also, quite literally, been GOP mouthpieces on the issue of the economic stimulus package and job creation. In July, House Republicans took to the floor to repeat the mantra “where are the jobs?” And Fox’s anchors, led by America’s Newsroom co-host Bill Hemmer, have adopted the phrase as their own, repeating it over and over on their news shows (on both Fox News and the Fox Business Network). Watch a compilation:

While asking the question again and again, Fox hasn’t seemed interested in finding the answer. After all, officials in many states — including North Carolina, Alabama, California, Idaho and Ohio — have been steadily reporting the number of jobs they’ve created. And today, a new report from the Recovery Accountability and Transparency Board, which oversees the stimulus implementation, stated that “about 30,000 jobs have been directly created or saved by contractors who received money from the federal stimulus program.”

Thus far, Fox contributor Juan Williams seems to be the only one acknowledging the truth, saying that Fox consists of “conservative audience-oriented programming. And I don’t think anybody is going to debate that.”

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