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Economy

JP Morgan CEO Jamie Dimon Uses CGI Stage To Hit Regulatory Reform

By Pat Garofalo on Sep 25, 2009 at 2:00 pm

Editor’s note: The Wonk Room is reporting from the Clinton Global Initiative conference this week. This is our fifth post.

dimonIn the wake of an economic crash caused in large part by financial wizards passing paper back and forth without creating anything, panelists at the Clinton Global Initiative today discussed how to make banking more socially useful. The discussion inevitably wound its way to the regulatory reform package currently before Congress, at which point JP Morgan Chase CEO Jamie Dimon seized the opportunity to attack the idea of creating a Consumer Financial Protection Agency (CFPA):

We need to simplify and strengthen our system, not add. We’re trying to just add multiple layers of regulation. I tell people, if our legal department didn’t do a good job, we would fix our legal department. The government would create another legal department. [laughter] And all you’re doing is replicating the same thing in a different form.

Listen here:

However, the CFPA is not meant to replicate existing agencies, but to fill a void that currently exists, as no agency is solely responsible for consumer protection. It will also remove the consumer financial protection responsibilities from the other regulators, such as the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Trade Commission, in a sense providing some of the simplification that Dimon says is necessary.

“I think clearly you have had a lot of abuses, and whatever was on the books wasn’t being enforced,” said Morris Goldstein, a former top official at the International Monetary Fund and a researcher for the Peterson Institute of International Economics. “I think it makes sense to try to wrap it together and give someone the responsibility to deal with the great bulk of it.”

With his choice of language disparaging the CFPA, Dimon is channeling the Chamber of Commerce, which is circulating ads warning against the CFPA proposal that read “maybe instead of making government bigger, we should focus on making government better.” Plus, as CAP’s Andrew Jakabovics and Jeff Chapman found, JP Morgan was no angel during the subprime boom:

JP Morgan Chase, like other major banks in 2006, was much more likely to charge higher prices to African-American and Hispanic borrowers than whites and Asians, even among high-income borrowers. Over two-thirds of JP Morgan Chase’s higher-priced lending was done through a subprime arm—Chase Manhattan Bank.

As David Lazarus put it in the Los Angeles Times, “if banks play fair and keep their noses clean, they’ll have nothing to fear. So why are they so fiercely opposed to having a new cop patrolling the neighborhood?” Indeed, the banks look like they are using the spectre of big government to defend their right to rip-off and deceive consumers.

Yglesias

The SPD’s Unreal Campaign

By Matthew Yglesias on Sep 25, 2009 at 1:28 pm

logo_spd_red

The basic contours of Germany’s election campaign are that absolutely everyone expects the Christian Democrats to secure a plurality of seats in the Bundestag. What’s more, everyone knows that the CDU’s first choice is to form a coalition with the libertarianish Free Democrats. So if CDU+FDU holds a majority, that’s what you’ll get. If they don’t hold a majority, then the CDU will form a grand coalition with the Social Democrats. Since there’s a grand coalition in office right now, somewhat paradoxically if you want the status quo to continue what you need to do is vote for the main rival of the currently ruling political party. Alternatively, if you want to do what the Chancellor wants you need to vote for the largest official opposition party in parliament.

What’s a bit odd is that as best I can tell the SPD feels they just can’t make this argument explicitly. Instead of running a pro-status quo campaign against the FDP’s unpopular free market economics, they’re basically trying to maintain a pretense of running a change campaign against Angela Merkel and the CDU. I suppose I understand why they feel they can’t pivot in this direction, but it seems like a bit of a tactical error.

Politics

Kyl Asserts ‘I Don’t Need Maternity Care’ In My Health Policy; Stabenow Shoots Back ‘Your Mom Probably Did’

By Amanda Terkel on Sep 25, 2009 at 1:27 pm

Today, the Senate Finance Committee debated Sen. Jon Kyl’s (R-AZ) amendment to prohibit the federal government from “defining the health care benefits offered through private insurance.” Kyl tried to make his case by citing the unnecessary expense of maternity care. He was quickly smacked down by Sen. Debbie Stabenow (D-MI):

KYL: I don’t need maternity care, and so requiring that to be in my insurance policy is something that I don’t need and will make the policy more expensive.

STABENOW: If I could just interject once with my colleague — I think your mom probably did. (LAUGHTER)

KYL: Over 60 years ago my mom did. (LAUGHTER) You notice I wasn’t too specific with regard to that.

Watch it:

Of course Kyl doesn’t need maternity care; he will never be a mother. As Igor Volsky notes at the Wonk Room, Kyl’s amendment “would prohibit the government from defining which benefits should be included in a standard benefit package and would permit health insurance companies to design policies that exclude higher-cost beneficiaries.”

Maternity care, in fact, is a perfect example of why Kyl’s amendment is so bad. Most individual health insurance markets don’t cover maternity care. In fact, according to the Kaiser Family Foundation, only 14 states have a requirement for such coverage, and the number of plans without maternity coverage continues to rise dramatically. Anthem Blue Cross — which has been actively fighting health care reform — considers pregnancy optional and therefore not necessary to insure:

“The point of insurance is to insure against catastrophic care costs. That’s what you’re trying to aggregate and pool for such things as heart attacks and cancer,” said an Anthem Blue Cross spokesman. “Having a child is a matter of choice. Dealing with an adult onset illness, such as diabetes, heart disease breast or prostate cancer, is not a matter of choice.”

“A well defined minimum benefits package would compel health insurers to provide basic services to all Americans,” adds Volsky. “The Kyl amendment, which ultimately failed, would have allowed the industry to continue profiting from discriminatory practices.”

Health

Stabenow Replies To Kyl: You Don’t Need Maternity Benefits, ‘But Your Mother Did’

By Igor Volsky on Sep 25, 2009 at 12:56 pm

This afternoon, while debating an amendment to prohibit the federal government from “defining the health care benefits offered through private insurance,” Sen. Jon Kyl (R-AZ) argued, “I don’t need maternity care, and so requiring that to be in my insurance policy is something that I don’t need and will make the policy more expensive.”

Sen. Debbie Stabenow (D-MI) interjected into Kyl’s remarks to remind him, “I think your mom probably did.” Watch it:

Kyl’s amendment would prohibit the government from defining which benefits should be included in a standard benefit package and would permit health insurance companies to design policies that exclude higher-cost beneficiaries. Currently, “it is difficult and costly for women to find health insurance that covers maternity care” in the individual health insurance market. According to a survey conducted by the National Women’s Law Center, the vast majority of individual market health insurance policies “do not cover maternity care at all. A limited number of insurers sell separate maternity coverage for an additional fee known as a ‘rider,’ but this supplemental coverage is often expensive and limited in scope.”

A well defined minimum benefits package would compel health insurers to provide basic services to all Americans. The Kyl amendment, which ultimately failed, would have allowed the industry to continue profiting from discriminatory practices. As former health insurance executive Wendell Potter explained in an interview with ThinkProress, insurers would like to move us all into “these limited benefit plans that are very skimpy and don’t cover you, don’t cover what you need. That way, when you do get sick, they’re not on the hook to pay you anything. They would love to have you enrolled in these.”

Update

Just 14 states require insurers to provide maternity care benefits.

Politics

Jindal Was The Only Governor To Skip Biden’s Conference Call On The Stimulus

By Amanda Terkel on Sep 25, 2009 at 12:40 pm

Yesterday, the White House held a conference call between Vice President Biden and governors of U.S. states and territories. The purpose of the call, according to the White House pool report, was to “exhort the states to collect and submit quarterly numbers of jobs created and saved by the American Reinvestment and Recovery Act by the deadline of Oct. 10.” Forty-nine state governors or their representatives joined the call. The one person who skipped it? Louisiana Gov. Bobby Jindal (R). From the pool report:

The invite was sent to 55 states and territories; if the governor could not join the call, a Lt. Governor, Chief of Staff or ARRA designee called in. There was one no-show state: Louisiana. Three no-show territories: Guam, Puerto Rico, American Samoa.

Biden has been aggressively reaching out to U.S. mayors and governors to help them use stimulus funds. In July, Time reported that Biden had been able to get every governor on the line except Sarah Palin of Alaska, Rick Perry of Texas, and Jindal.

Jindal has been one of the most outspoken critics of the Recovery Act — at the same time he goes around the state and takes credit for the federal dollars he was handing out. In July, Jindal declared the legislation a “stimulus that has not stimulated.” Yet he had no problems with handing out giant checks with his name on them…that contained millions of dollars of Recovery Act funds for job training programs, housing assistance programs, homelessness prevention programs, police training, criminal justice technology upgrades, and community development block grants.

Jindal Handing Out Stimulus Checks

A Jindal appointee has even blocked the state transportation department from placing signs indicating that projects were funded by the stimulus:

State projects financed with federal stimulus dollars will have no signs that say that, said Mark Lambert, spokesman for the state Department of Transportation and Development.

Lambert said the decision was made by DOTD Secretary William Ankner.

“He directed that signs not go up,” Lambert said of Ankner.

Lambert noted, however, that “road and bridge work paid for with state surplus dollars included signs that pointed out the source of the funds.” His explanation was that the state signs were cheaper. ThinkProgress contacted Jindal’s office to ask why the governor skipped the Biden call, but we did not receive a response.

Climate Progress

Energy and Global Warming News for September 25: Schwarzenegger says he’s ready to work for Obama; Clean-energy jobs starts bidding wars among states

By Climate Guest Blogger on Sep 25, 2009 at 12:32 pm

Schwarzenegger: ready to work for Obama, go green California

Governor Arnold Schwarzenegger is ready to put his star power to work for President Barack Obama on the environment when his own term ends next year, the former movie actor said on Thursday.

Republican Schwarzenegger is arguably the biggest environmentalist in his party and razzed Washington, which is struggling to pass climate change legislation and prepare for international talks, for wrangling with other countries over global warming goals rather than setting an example.

“Did we say China, you go first with human rights, and we will follow you? No. We led,” he said in an address at the Commonwealth Club lauding his state’s climate change plan, which is the most aggressive in the nation.

Term limits will force Schwarzenegger out of office in late 2010, and his main accomplishment may be his environmental record — sweeping efforts to change the state’s system of government and to permanently balance the budget have largely failed.

Asked if he would be willing to serve in the Obama administration, be a global ‘green’ ambassador, or even star in a TV series as governor of California after he steps down, Schwarzenegger said, “Yes to all those things.”

Clean-energy jobs touch off bidding wars between states

When Arizona economic development officials look across their state, they envision the Saudi Arabia of solar. The state has sun, land, workers and proximity to California, the biggest solar market in the U.S.

Yet for years, Arizona has failed to attract the big solar manufacturers that build the mirrors, panels and other components for solar equipment. In the past three years, about 50 renewable-energy companies considered Arizona but opted to put plants “” and jobs “” in other states, says Barry Broome, CEO of the Greater Phoenix Economic Council.

“We’ve lost every one of the projects to incentives offered by other states,” Broome says. Arizona hopes to improve its odds in what’s become a pitched battle among states to nab renewable-energy companies, including those in the solar, wind and biomass sectors. Come January, Arizona will have $350 million in new incentives at its disposal to woo renewable-energy firms.

Renewable energy has emerged as the new frontier in economic development in the U.S. And states, such as Arizona, are rolling out tax breaks, job training and cash to try to capture a piece of the action and the job growth it promises. “This is definitely the industry of the year from an economic-development standpoint,” says William Becker, CEO of Incentives Advisors, which helps firms access and manage state incentives. “I’ve never seen such a rapid increase in the number of state programs for one industry.”

The fervor is driven by expectations of increasing demand for renewable energy. States, especially California, are extending big incentives to consumers and businesses to go green. Two dozen states require electricity providers to supply more power from renewables, and a handful of other states have set renewable goals. Meanwhile, billions of dollars in venture capital is going to so-called clean-tech start-ups in everything from alternative fuels to energy storage and generation. The federal government has also dedicated more than $100 billion to the clean-tech industry via grants, loan guarantees and other incentives, says consulting firm Ernst & Young.

Vietnam Finds Itself Vulnerable if Sea Rises

Read more

Yglesias

Admiral Mullen Backs Female Submariners

By Matthew Yglesias on Sep 25, 2009 at 12:28 pm

HMAS_Onslow_1998 1

One of the major fields of military service from which women are still excluded is working on America’s fleet of submarines. But via Robert Farley it seems that chief of staff Admiral Mike Mullen thinks we should change that. Why aren’t women allowed on subs in the first place?

Opponents of lifting the ban have argued for decades that space is at a premium on submarines. To accommodate privacy needs of females, including separate berthing and “heads” or toilet/shower facilities, would be “prohibitively expensive,” Navy has argued. Watch duty, bunk management, extra supplies and incidents of fraternization and harassment would complicate submarine life, according to one study done for the Navy in 1994.

This seems, at best, like an argument for single-sex submarines not for keeping women off submarines altogether. In general, my understanding is that women, being smaller, are actually generally better-suited for submarine work than are men. In Australia, where women do serve on submarines, the main practical problem that seems to have arisen is male submarine commanders making inappropriate remarks to the press leading to minor political scandal.

Politics

Fox News scrubs ‘death threats’ out of hyped story on school kids singing about Obama.

By Matt Corley on Sep 25, 2009 at 11:59 am

For the past two days, conservative blogs and Fox News have been hyping an old YouTube video showing New Jersey schoolchildren singing a song about President Obama during Black History Month, calling it “indoctrination.” When Fox’s website initially posted on the story, it reported that the “school was placed temporarily on lockdown after its principal received death threats.” But as Raw Story’s Stephen Webster points out, the Fox story has changed, removing not only references to death threats, but also comments from a parent who “took an opinion contrary to others expressing outrage.” Thus far, Webster has been unable to confirm the threats and writes that he will be following up his inquiry, trying to answer the following questions:

Who edited this piece? Why was FoxNews.com writer Cristina Corbin’s credit removed? Did the principal really receive death threats, or was that inclusion in the second paragraph erroneous? And perhaps most important, why would an allegedly “fair and balanced” media organization censor highly relevant comments offering a contrasting opinion?

(HT: Eric Boehlert)

Update

Webster has updated his story, saying that Fox has restored much of the original language. He adds that the school denied to him that it was ever on “lockdown” and that Public Safety Director Walt Corter told The Burlington County Times that claims of “death threats” were unsubstantiated.

Yglesias

Secret Iranian Nuclear Facility Revealed

By Matthew Yglesias on Sep 25, 2009 at 11:34 am

Big news today as a joint Obama/Brown/Sarkozy press conference reveals Western intelligence knowledge of a secret Iranian nuclear facility “built inside a mountain near the ancient city of Qum.” Those three leaders, joined in the policy substance though not in person by Angela Merkel, are demanding immediate opening of the facility to inspections or else retaliatory sanctions. Presumably this means we’ll get to see Russia’s new talk of cooperation on Iran put to the test.

Yglesias

The Case for Alcohol Taxes

By Matthew Yglesias on Sep 25, 2009 at 11:28 am

Mark Kleiman makes the case for higher alcohol taxes:

I should also offer a mea culpa for whining about high soda prices after repeatedly blogging that I think a soda tax would be a good idea. As a heavy Diet Coke drinker, such a tax would be annoying to me personally but it’s still good public policy. When you’re raising revenue, you have to worry about the incentives you’re creating. Are you creating incentives to not work? To avoid making investments? With a soda tax you’re creating an incentive to not drink tons of soda. That’s not a very problematic incentive at all, so it’s an efficient source of revenue. Higher alcohol taxes, however, are better.

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