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Economy

Bank Of America Paid Foreclosure Bonuses, Lied

IMF Says Sequester Is Wrecking U.S. Economy

Bank Sold House Even Though Homeowner Paid Up

NEWS FLASH

Mortgage Modifications Under Obama’s Signature Foreclosure Prevention Program Fall To Lowest Level Since April 2009 | The Huffington Post’s Arthur Delaney notes that, according to the latest data, “fewer homeowners entered preliminary mortgage modifications under the Obama administration’s signature foreclosure prevention initiative in June than in any month since April 2009.” The Home Affordable Modification Program (HAMP) was supposed to help 3 to 4 million homeowners but so far, “nearly 870,000 struggling homeowners have been kicked out of the initiative, while just 657,044 remain in permanent modifications.”

Justice

S&P Director: GOP’s Balanced Budget Amendment Would Hurt America’s Creditworthiness

By Marie Diamond posted from ThinkProgress Justice on Aug 9, 2011 at 6:35 pm

After the first round of the contentious debt limit fight, congressional Republicans are redoubling their efforts to push through a so-called Balanced Budget Amendment as a solution to the country’s financial woes. Last week, Speaker John Boehner (R-OH) told GOP House members that the best thing they could do during the August recess was to sell the BBA to their constituents. Republicans have even suggested that Standard & Poor’s recent downgrade of U.S. debt from its sterling AAA rating would not have happened, or could be reversed, if a Balanced Budget Amendment were passed.

This weekend the head of S&P, John Chambers, publicly dismissed that idea as foolhardy when he said passage of a BBA would hurt, not help, America’s creditworthiness. Chambers, S&P’s managing director, told CNN’s Wolf Blitzer that a balanced budget measure “would just reduce your flexibility in a crisis”:

BLITZER: Would it be important or not that important for Congress to pass a Balanced Budget Amendment to the Constitution?

CHAMBERS: In general, we think that fiscal rules like these just diminish the flexibility of the government to respond. Also, when Congress has a long track record of trying to bind itself with various rules…But when push comes to shove, they don’t bind very much. So even if you had a Balanced Budget Amendment, you’d have some questions about it’s credibility, and it would just reduce your flexibility in a crisis.

Watch it:

Chambers also said it could take as long as a decade for the U.S. to regain its AAA rating, spurning GOP suggestions that a hasty and drastic revision to the U.S. Constitution could automatically fix the downgrade. The Republican plan would require a balanced budget for each fiscal year and cap spending at 18 percent of GDP.

As Chambers said, a balanced budget amendment would tie government’s hands and render it unable to take corrective measures during a recession. By slashing spending and mandating “perverse actions in the face of recessions,” it would greatly damage America’s already weak economy — which is why five Nobel Prize-winning economists have denounced the idea.

NEWS FLASH

CHART: Women Underrepresented In Science, Technology, Engineering, And Math Jobs | At Science Progress, Rebecca Lefton points to new Commerce Department data showing that “women are largely underrepresented in science, technology, engineering, and math, or STEM, jobs.” “STEM jobs are disproportionately held by men at every level of educational attainment,” she noted. “Women only represent one-quarter of STEM jobs — the same level as 2000 — though they make up approximately half of the workforce overall.”

The Commerce Department concluded that there is “definitive evidence of a need to encourage and support women in STEM with a goal of gender parity.”

NEWS FLASH

Democratic Sens. Murray, Baucus, Kerry Named To Debt Super Committee | Senate Majority Leader Harry Reid (D-NV) has reportedly tapped Sens. Patty Murray (D-WA), John Kerry (D-MA), and Max Baucus (D-MT) to join the super committee created by the deal that raised the federal debt ceiling. The super committee is charged with crafting a deficit reduction package by Thanksgiving; seven of the 12 members have to approve the plan to send it to the full Congress.

Health

Anti-Stimulus Christie Touts Success Of Health Clinic Benefiting From Stimulus Dollars

By Guest Blogger posted from ThinkProgress Health on Aug 9, 2011 at 4:45 pm

After campaigning on the GOP position that states should reject federal stimulus money with “strings attached,” New Jersey Gov. Chris Christie (R) yesterday touted his commitment to health care by visiting a community health center that has benefited from two federal health grants made available through the American Recovery and Reinvestment Act:

“The Burlington City Health Center and all of our New Jersey community health centers are an essential part of our health safety net for those who otherwise would not have a medical home,” Christie said. “These centers offer affordable, high-quality care to residents and families in need. I am proud of the strong support my administration has provided for community health centers in the budget – $113 million in Medicaid and $46.4 million for the uninsured. With this assistance, we are making sure the people and communities who rely on these services lead healthy lives now and in the future.”

But the Burlington City Health Center and its parent organization, the Southern Jersey Family Medical Centers, owe their success to more than state funds; the health centers — which provide health services to over 51,000 of New Jersey’s low-income residents — accepted $1.8 million and $3 million in federal funding through the ARRA’s Capitol Improvements grant and the Health Information Technology Implementation grant, respectively.

Through the combination of grants, the Southern Jersey Family Medical Centers acquired the resources to expand their electronic health records and to improve their facilities through construction or renovation, thereby improving the quality of care for thousands of people.

Ninety-seven percent of health leaders surveyed perceive providers like community health centers as address “a critical need by serving individuals who remain uninsured and by being best equipped to meet the special needs of vulnerable populations,” according to a new Commonwealth Fund/Modern Healthcare report.

Since passing its universal health care law under former Gov. Mitt Romney (R) in 2006, Massachusetts has seen its community health centers rise to meet this need. Clinics saw a surge of 31 percent in the number of patients seeking treatment between 2005 and 2009, health researchers reported in the Archives of Internal Medicine. The uninsured portion of Massachusetts’ population has tumbled from 7 percent in 2006 to 1.9 percent just last year.

–Sarah Bufkin

Asked About Helping The Poor At Rick Perry’s Prayer Rally, Pastor Bemoans ‘Excessively Heavy’ Taxation

By Scott Keyes and Lee Fang on Aug 9, 2011 at 3:35 pm

ThinkProgress filed this report from The Response prayer rally in Houston, Texas.

Pastor Jim Garlow

The Bible is nothing if not clear about caring for the neediest and those forgotten by society. Proverbs 14:31 reads, “Whoever oppresses the poor shows contempt for their Maker, but whoever is kind to the needy honors God.” Matthew 25:40 says, “Whatever you did for one of the least of these brothers and sisters of mine, you did for me.” The Old Testament is no exception; Deuteronomy 15:11 instructs, “I command you to be openhanded toward your fellow Israelites who are poor and needy in your land.”

On Saturday, ThinkProgress attended Texas Gov. Rick Perry’s (R) prayer rally in Houston, Texas and spoke with one prominent pastor, Jim Garlow, about Jesus’ teachings on the poor. (Garlow is best known for comparing orphans of the Sept. 11 attacks to children raised in same-sex households and once saying that African Americans saved the country from the “enslavement of gay marriage.”)

In light of the Bible’s instruction to care for the sick and needy, we asked Garlow what Jesus would think about austerity and whether the government was doing enough to follow his teachings on the poor. To our surprise, rather than advocating for the destitute, Garlow instead pointed to the real culprit: high taxes. He noted that “one of the principles that’s so clear is ‘thou shalt not steal,’” and later went on to decry what he saw as “taxation [that] has become so excessively heavy.”

FANG: I think the question that some critics have raised is, “what would Jesus cut?” As we look at where do we need to tear down the size of government.

GARLOW: Government is best when it’s closest. It can meet the needs of people best when it’s closest to them. [...] The Bible has a lot to say about that kind of thing as it relates to how Washington DC has lead us recently. One of the principles that’s so clear is “thou shalt not steal.” But the majority of Congress for so many years now has spent us close to oblivion and stolen from future generations. [...]

KEYES: What would you say to people who might argue that the government hasn’t been doing enough to follow Jesus’ teaching to look out for the sick and the poor?

GARLOW: The command for the sick and the poor goes way beyond governmental aspects. It goes on us as individuals, what you can do as an individual or I can do, what the church of Jesus Christ can do. My sense is the taxation has become so excessively heavy. with tremendous cost overrides that literally people who otherwise would be able to assist[...cut off.]

Still, many other Christian leaders are working tirelessly to advocate for the needy. Late last month, a major coalition of religious leaders from the Episcopal Church to the National Association of Evangelicals to the United Church of Christ met with President Obama to deliver a single message: the government needs to do more to help the poor. “Poor people don’t have an office on K Street,” noted Galen Carey of the National Association of Evangelicals. Pastor Jim Wallis, president of the Christian group Sojourners, asked simply, “What would Jesus cut?“

Justice

House GOP Plans To Exploit Jobs Crisis To Permanently Shut Down The Federal Government’s Ability To Regulate

By Ian Millhiser posted from ThinkProgress Justice on Aug 9, 2011 at 2:25 pm

Americans depend on federal regulators to keep them safe literally every single day. FDA regulations ensure that our medicines are safe, effective, and reasonably free from toxic side effects. Vehicle safety regulations allow us to buy cars that enable us to survive an accident. Before the federal government started regulating food safety, something as innocuous as a bottle of ketchup could contain a toxic mix of mold, rot, and spices added to cover up the flavor of decay.

And yet, House Republicans would effectively shut down these regulators’ ability to perform the most basic functions of their job:

The GOP will make a major push this fall for the REINS Act, which would require all major regulations to get a vote in Congress. [...] Unions and consumer groups are outraged over the REINS Act and have been lobbying against it.

They say it will severely delay regulations, increase corporate influence over health and safety rules through increased lobbying and allow politics to displace science. Especially problematic for them is a provision that if Congress does not approve a regulation within 70 days, it is cancelled and cannot be considered again.

House Republicans claim that REINS will simply provide an additional layer of congressional oversight before a federal agency can improve vehicle safety standards or reduce greenhouse emissions or streamline the FDA’s process for approving new drugs, but the actual effect of REINS would be to completely freeze much of the federal regulatory structure in place — permanently.

For one thing, while REINS’ chief sponsor claims that it would prevent new regulations from being filibustered in the Senate, the bill does not account for a loophole in the Senate rules. As a result, all but the most insignificant new federal regulations would be shut down completely unless they could somehow earn supermajority support in the Senate.

And even if the Senate somehow decided to put aside its partisan differences and start approving rules, it’s not even clear that it would have enough time to do so. Last year, the Senate simply sat on literally hundreds of bills that passed the House — many of them unanimously — because it didn’t have enough time to pass them. In 2010, federal agencies issued more than 90 new rules that would have required congressional approval within a narrow 70-day window if REINS were enacted. It’s anyone’s guess where Congress would find the time to approve all these rules.

Nor is it even clear how REINS would advance the right’s deregulatory agenda. As Sally Katzen, a former chief overseer of the federal regulatory process, points out, “Agencies sometimes propose eliminating outdated rules. But even these efforts at regulatory streamlining would nonetheless get caught in the REINS Act net, as deregulatory rules are nevertheless still rules.”

In short, REINS would place every major federal safety regulation, every agency’s major effort to rein in Wall Street, and even every major effort to reduce the burden of federal regulations in the hands of a body that just spent two months trying to decide whether to force America into a catastrophic economic default. If Congress can’t even agree to not blow up the entire U.S. economy, it unclear why anyone thinks that it could pass just one of the dozens of new measures REINS would require it to approve every year.

NEWS FLASH

Nebraska GOP Sen Candidate Compares Welfare Recipients To Scavenging Raccoons | In a speech this week, Nebraska AG Jon Bruning (R) compared welfare recipients to scavenging animals, suggesting the state is making it too “easy” for them. “The raccoons — they’re not stupid, they’re gonna do the easy way if we make it easy for them. Just like welfare recipients all across America,” said Bruning, who is running for Sen. Ben Nelson’s (D-NE) seat. “If we don’t send them to work, they’re gonna take the easy route.” Watch a video captured by American Bridge:

By Alex Seitz-Wald on Aug 9, 2011 at 1:45 pm

Fox News’ Megyn Kelly Gets It Right: ‘The United States Is In The Dark Ages When It Comes To Maternity Leave’

By Pat Garofalo on Aug 9, 2011 at 12:35 pm

Fox News’ Megyn Kelly returned to work yesterday after three months of maternity leave, and during her first show, she pummeled shock radio host Mike Gallagher, who back in May called Kelly’s maternity leave “a racket” that was “unbelievable.” Kelly not only took Gallagher to task for poo-pooing the notion that women should be able to stay home with their newborns, but she also pointed out that the U.S. is in “the dark ages when it comes to maternity leave,” as it is the only industrialized nation that doesn’t require employers to give new mothers paid time off:

KELLY: What a moronic thing to say…Is maternity leave, according to you, a racket?

GALLAGHER: Well, do men get maternity leave? I can’t believe I’m asking you this, because you’re just going to kill me.

KELLY: Guess what honey? Yes, they do. It’s called the Family Medical Leave Act. If men would like to take three months off to take care of their newborn baby, they can. [...] Just in case you didn’t know, Mike, I want you to know that the United States is the only country in the advanced world that doesn’t require paid maternity leave. Now I happen to work for a nice employer that gave me paid leave. But the United States is the only advanced country that doesn’t require paid leave. If anything, the United States is in the dark ages when it comes to maternity leave. And what is it about getting pregnant and carrying a baby for nine months, that you don’t think deserves a few months off so bonding and recovery can take place, hmm?…You can’t answer the question because there is no answer, my friend.

Watch it:

Kelly is spot-on. As the Project on Global Working families found during a survey of 173 countries, the U.S. is in some bad company when it comes to paid maternity leave:

Out of 173 countries studied, 169 countries offer guaranteed leave with income to women in connection with childbirth; 98 of these countries offer 14 or more weeks paid leave. Although in a number of countries many women work in the informal sector, where these government guarantees do not always apply, the fact remains that the U.S. guarantees no paid leave for mothers in any segment of the work force, leaving it in the company of only 3 other nations: Liberia, Papua New Guinea, and Swaziland.

The U.S. hasn’t required paid maternity leave even though such leave results in “a decrease of complications and recovery time for the mother and [a decrease in] the risk of allergies, obesity, and sudden infant death syndrome for the child.” So it seems that even a Fox News host can be sensible when personally faced with the implications of government policy.

(HT: Gawker)

Yglesias

Tim Pawlenty’s Extremely Weak Grasp Of Monetary Policy And International Finance

By Matthew Yglesias posted from ThinkProgress Yglesias on Aug 9, 2011 at 11:50 am

When American Bridge sent a tracker to record this talk from Tim Pawlenty, I’m sure they were hoping he’d commit gaffes with a bit more political potency than the ones on display here. But if you happen to care at all about policy substance, what you’re about to see is the former Minnesota governor make a number of blundering errors that reveal fundamental misunderstandings of how monetary policy and the international financial system works:

Pawlenty refers here disparagingly to “something called QE1 and QE2, the Treasury was buying our own debt. So they were paying off their Visa card with their Discover card.” This is simply not what either quantitative easing measure was. Rather, the Federal Reserve bought the debt. A good analogy would be to say that this is like paying off your Visa card by using magical powers to conjure up the amount of money you need. This is, of course, exactly what any household would do if they had magic powers. You probably don’t run your household finances or your small business like that because you probably don’t have magic powers. But the Federal Reserve does have the power to create money. The possible problem with money creation is that if you do too much of it, you get too much inflation, but we don’t have too much inflation.

Separately, Pawlenty doesn’t seem to understand U.S.-China bilateral trade at all, which is a problem because that’s just about the most important bilateral economic relationship we have. He suggests that we could “deal with these unfair trade practices” except for the fact that we owe China too much money. “You ever told off your banker?” This would be an excellent point except that Chinese purchases of American debt are the main “unfair” trade practice of which China stands accused. Buying American debt is the method by which China artificially depresses the value of its currency, subsidizing its export sector and hurting our exporting and export-competing firms. The purchase of debt isn’t a way of gaining leverage to prevent us from changing their policies, it constitutes the policy we want them to change.

GOP Rep. Disavows Norquist’s Anti-Tax Pledge: ‘I Don’t Care To Be Associated With It’

By Pat Garofalo on Aug 9, 2011 at 10:35 am

Rep. Jeff Fortenberry (R-NE)

Signing the anti-tax pledge promulgated by Grover Norquist’s Americans for Tax Reform — which stipulates that the signee will, under no circumstances, approve a tax increase — has almost become a must-take step for Republican politicians. Norquist is a kingmaker of sorts in right-wing circles, as he decides which policies do and do not violate the pledge.

As Tanya Somanader and Zaid Jilani put it, “Shackling Republicans to his anti-tax pledge, Norquist is dictating to Republicans that they cannot close a single tax loophole or allow one tax cut to expire, not even to entice Democrats into agreeing to much larger spending cuts.” However, not every Republican congressman is enamored with Norquist’s approach. During a town hall yesterday, Rep. Jeff Fortenberry (R-NE) explained that he has disavowed Norquist’s anti-tax pledge, which he had previously signed, because “it’s too constraining“:

In answer to one question, the 1st District Republican congressman revealed he informed Grover Norquist and his anti-tax organization he no longer is committed to that organization’s pledge to oppose any form of tax increases.

“I did sign that pledge when I was first running” for the House in 2004, Fortenberry said. “I no longer sign any pledges.”

A pledge “restrains your ability to think creatively,” he said, noting Norquist attempts to interpret and define what is considered a tax increase.

“I informed the organization I don’t consider (the earlier pledge) binding,” Fortenberry said. “I don’t care to be associated with it. It’s too constraining.”

Fortenberry later said, “We have a broken tax code that is skewed to the wealthy and corporations (who) know how to move capital around,” and endorsed revenue-positive tax reform.

Fortenberry is not the only Republican to publicly clash with Norquist recently. Sen. Tom Coburn (R-OK) admonished Norquist and ATR for opposing cuts to ethanol subsidies. “I think you all think [Norquist] has a whole lot more hold than I think he has,” Coburn told the media, adding, “taxpayers should be encouraged that Republican senators overwhelmingly rejected the ludicrous argument that eliminating tax earmarks is a tax increase.”

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NEWS FLASH

Chart: Women Have To Have A Ph.D. To Make As Much As Men With A B.A. | Kay Steiger pulls out this chart from Georgetown’s Center on Education and the Workforce, which notes that, when it comes to lifetime earnings, women with a Ph.D. make as much as men with a B.A., while men with some college but no degree make about as much as women who have completed college:

According to the latest data, women make about 77 cents for every dollar that men make.

Econ 101: August 9, 2011

By Pat Garofalo on Aug 9, 2011 at 8:30 am

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.

  • Bank of America’s market value has fallen by $33 billion, or 34 percent, over the last week. [Bloomberg]
  • Bank stocks fell 11 percent yesterday “in their biggest one-day drop since April 2009.” [Wall Street Journal]
  • The Department of Justice and four states yesterday “filed a multibillion-dollar fraud suit against the Education Management Corporation, the nation’s second-largest for-profit college company, charging that it was not eligible for the $11 billion in state and federal financial aid it had received from July 2003 through June 2011.” [New York Times]
  • Officials at the Federal Reserve “may strengthen their commitment to record monetary stimulus as soon as today after a faltering economic recovery and a U.S. credit- rating cut provoked a rout in global stocks.” [Bloomberg]
  • According to the latest data, “it will be well into the first quarter of 2013 before median home prices across the nation will even be on par with prices from the first quarter of this year.” [CNN Money]
  • Mortgage giants Fannie Mae and Freddie Mac had their credit downgraded by Standard & Poors to AA+ yesterday, reflecting their dependence on the federal government. [The Hill]
  • Talks continued yesterday between Verizon and 45,000 striking employees, “but the two sides indicated they are still far from reaching an agreement after two days of work stoppage.” [The Hill]
  • A new analysis suggests that students who benefit from federal Title I funds, meant to help low-income students, “are making strides in mathematics and reading.” [Education Week]
  • The Securities and Exchange Commission yesterday “sent subpoenas to high-frequency trading firms in relation to last year’s ‘flash crash’ probe.” [CNBC]
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