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Posts tagged with 'social security'

Weekly Audit: Hostage-Taking Over the Debt Ceiling

Posted Apr 26, 2011 @ 11:29 am by
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Creative Commons, Flickr, cszarBy Lindsay Beyerstein, Media Consortium blogger

The latest contrived showdown between Congressional Republicans and the White House is over what concessions the GOP will demand in order to increase the federal debt ceiling.

George Zornick of The Nation explains how the shakedown works:

Congress now needs to approve any borrowing past the $14.3 trillion debt ceiling, which the United States will reach “no later” than May 16, according to Treasury Secretary Timothy Geithner. If Congress doesn’t raise the debt ceiling, the government would have to stop spending—including stopping interest payments on those Treasury bonds, meaning that the United States would effectively default on its debt.

The debt ceiling has to be raised and everyone knows it. Surely the Republicans knew it when they voted for tax cuts for the rich with borrowed money. If the debt ceiling is not raised, the United States will default on some of its obligations. Just like what happens after you miss a credit card payment, the country’s creditors will demand higher interest in order to lend to us in the future.

Playing chicken with the debt ceiling is a recipe for increasing the national debt. Paul Waldman argues in The American Prospect that the Republicans hate government so much that they are willing to declare war on the economy in a quixotic bid to smash the state:

The reason we’re now seeing an unprecedented amount of attention paid to a vote that ordinarily passes with little notice is that the Republican Party’s agenda is being set by a group of ideological radicals who seem quite willing to cripple the American economy if that’s what it takes to strike a blow against the government they hate so much.

Peak Crazy

At AlterNet, Joshua Holland explains why failure to raise the debt ceiling would be an economic catastrophe that could jeopardize the economic recovery. “Peak Crazy,” he calls it.

However, Holland notes that a showdown over the debt ceiling does not risk an immediate government shutdown, like the one we faced over the budget battle. Borrowing isn’t the only way that government agencies are funded. The government could still spend the $150 billion or so it takes in every month in tax revenue, for example.

Yet, Senate Minority Leader Mitch McConnell (R-Kentucky) has announced that 47 GOP senators oppose raising the debt ceiling unless “credible attempts” are made to cut federal spending. Meanwhile the Tea Party is launching an all-out lobbying effort to urge House Republicans not to raise the debt ceiling without major spending cuts.

The Tea Party’s wish list includes some total pipe dreams like a balanced budget amendment to the constitution, and a law to require a two-thirds majority for all future tax increases. Former senator and current U.S. presidential hopeful Rick Santorum cheerfully announced that he would let the United States default on its debt if health care reform is not repealed. Rep. Michele Bachmann (R-Minn) helpfully suggests paying the interest on Treasury Bills using money that would otherwise go to Social Security.

Shoot the hostage

Cenk Uygur of the Young Turks argues that Democrats are panicking needlessly and, once again, offering needless preemptive concessions to the Republican fringe in the form of a proposed “hard cap” on government spending, which would cap new government spending, and subtract any overruns from social welfare programs like Medicare and Social Security.

The truth, Uygur notes, is that Wall Street has already told the Republicans in no uncertain terms that the debt ceiling will be raised. The economic consequences of doing anything else would be unthinkable. The Tea Party can yell and scream, but the adults have already made the decision. Knowing this, Democrats should not be trying to placate the Republicans so as to induce them to do something they will ultimately end up doing.

Digby on Social Security

Democrats are wavering in their decades-long commitment to defend Social Security, Heather Digby Parton (a.k.a., “Digby”) writes in In These Times:

In a quixotic attempt to fix the problems in the current economy without confronting the plutocrats, the Democrats are using the illogical argument that since Social Security is projected to have a shortfall in 35 years, we must cut benefits now. And they seek to prove to “the market” that the government is fiscally responsible by showing it’s willing to inflict pain on its citizens—in the future.

Even if we do nothing, Social Security can pay out full benefits for the next 35 years. There is no crisis. A small increase on the payroll cap on Social Security could shore up the program for generations to come. Republicans oppose Social Security because they are ideologically opposed to social welfare programs, not because Social Security is broken.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: Wall Street Destroyed $8 for Every $1 Earned

Posted Jan 24, 2011 @ 5:13 pm by
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Flickr user Pichette Photo, via Creative Commons Licenseby Lindsay Beyerstein, Media Consortium blogger

Tonight, President Barack Obama will deliver his State of the Union address. A major theme of the speech will be jobs and the economy. Let’s hope the president spares a few minutes for Wall Street reforms that might prevent a repeat of the economic collapse that we’re slowly starting to recover from.

As Kai Wright points out in ColorLines, the State of the Union is the unofficial kickoff of the 2012 election season:

The still churning foreclosures and mounding debt in black and brown neighborhoods don’t suggest a stabilized economy anywhere except Wall Street, but let’s set that familiar fight to the side for now. The point is that whether we’re talking about creating jobs or seating district court judges, the time for making policy is gone. Starting tomorrow night, it’s all talk until we vote next.

Amy Dean of Working In These Times shares Wright’s skepticism. With the Republicans in control of the House and the Democrats hanging on to the Senate, we’re looking at a legislative stalemate until the next election. Dean argues that activists should use this lull in the action to refocus their organizing at the grassroots level.

Wall Street destroyed $8 for every $1 it earned

In AlterNet, Les Leopold asks why bankers are earning such huge bonuses while the financial system is in disarray. According to standard economic theory, your compensation reflects the value of your work. Yet, according to Leopold’s back-of-the-envelope calculations, the financial sector has destroyed $8 worth of wealth for every dollar it earned over the last 5 years. His estimate includes the wealth-destroying impact of the subprime mortgage crisis and other epic Wall Street blunders. (more…)

Weekly Audit: Grandparents Take on the Recession

Posted Dec 28, 2010 @ 12:54 pm by
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Flickr, Creative Commons, Qole PejorianBy Lindsay Beyerstein, Media Consortium blogger

Raising kids is never easy, but a recession only makes the job tougher. As more parents struggle to make ends meet, an increasing number of grandparents are stepping in to fill the void. One out of 10 U.S. kids lives with a grandparent, according to new research released by the Pew Charitable Trust, Katti Gray reports for ColorLines. About 40% of these children are being raised primarily by their grandparent(s).

Dawn Humphrey, a 51-year-old grandmother who is raising her 4-year-old grandson, describes her new role as challenging but deeply rewarding. Humphrey and her partner are making the best of a bad situation. Humphrey herself was laid off and her unemployment benefits ran out 3 weeks ago:

“Our situation would be ideal if I had a job,” Avion’s grandmother said. “We’re not materialistic people but this boy has needs. He looks to us for comfort and for love, when he’s hurt and needs help going to the bathroom. Just hearing him calling be ‘Grandma,’ I don’t know how to explain it. It’s just pure joy.”

Humphrey’s partner, Vernon Isaac, agrees:

“Yes, but, wow, grandparents like us could use some help.This recession, with things as tough as they are … I would love to give him the things I never got. But what I do give him is love. And that’s the most important thing.”

The magical thinking in free market ideology

When it comes to fingering culprits behind our economy’s current malaise, one could do worse than note just how poisonous so-called “free-market” ideology has been. That’s the diagnosis of financier Yves Smith, author of ECONned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism, who recently spoke to the Real News Network.

Smith argues that magical thinking about markets has wrecked the United States’ economy. The old view was that the economy needed to be managed so that businesses could thrive. The new dogma is that “free markets are good” and therefore whatever happens as a result of “market processes” must be better than what would have happened if the government had intervened. By definition, everything that happens in a market is the result of market processes. So, all is for the best in the best of all possible worlds! (It’s all fun and games until somebody needs a bailout.)

As Smith says:

[W]e then went to a model where everything that–anything that came out of, quote, “free markets”, even though free markets is–conveniently means something different, depending what context it’s in. But we have this kind of nebulous, flexible, free markets concept. But the idea is that anything that happens out of market activity is deemed to be virtuous, so if we go to less regulation, which–corporate interests took this free markets mantra and used it to justify deregulation–if we as a result of deregulated activity suddenly have a big trade deficit, well, we shouldn’t worry: that’s really the result of free markets, and somehow it will correct [itself].

Geico Gecko and Flo

What does it say about our economy that two of the most recognizable fictional characters on TV are insurance company mascots? For David Sirota of In These Times, the GEICO Gecko and Flo from Progressive Auto Insurance are chipper harbingers of economic death.

For Sirota, these ads epitomize everything that’s wrong with contemporary capitalism: Drivers are legally obliged to buy auto insurance. Instead of innovating or providing better service, GEICO and Progressive spend millions of dollars to poach each other’s customers with catchy TV ads.

Who can afford to retire?

There has been a lot of talk lately about the prospect of raising the retirement age from 65 to 69 to shore up Social Security. This proposed change has been vehemently opposed by progressives. Why raise the retirement age when we could just as easily raise the payroll tax ceiling? In Ms. Magazine former Harvard sociology professor Mariko Lin Chang argues that the inequalities of raising the retirement age pale beside the inequities that are already built into the system because of preexisting income differences.

The lower your wages, the longer you have to work to retire at a given level of Social Security benefits. The average American works for 40 years to collect full Social Security benefits. However, the average female worker earns only 77 cents per dollar earned by the average male. So, the average woman already has to work for 50 years to retire with the benefits the average man earns after 40 years.

Similar statistics apply to workers of color, who earn less on average than white workers.

Defending the official retirement age of 65 is a worthy endeavor, but we shouldn’t forget that the official criteria already obscure the brutal financial realities facing large segments of the workforce.

Southern anti-poverty programs at risk

Big Republican gains in state legislatures in the deep south may put poverty programs in jeopardy, Monica Potts of The American Prospect reports. In the midterm elections, Republicans took control of state legislatures in North Carolina and Alabama for the first time in a century. The GOP swept to power on a tide of anti-tax, anti-government spending sentiment. According to Potts:

Anti-poverty programs are among the most vulnerable because states have flexibility over how they spend federal money they receive for Temporary Assistance for Needy Families and food stamps. Rules for TANF, the program once known as welfare, require states to maintain a certain level of spending to keep their block grants, but how and on what they spend the money is largely up to them.

States are ordering off a menu of programs, for which they must provide matching funds if they choose to participate. Chris Kromm of the Institute for Southern Studies predicts that states will try to save money by cutting programs like prescription drug and dental care for the poor, rather than come up with their share of matching funds.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: Tax Cuts for the Rich Extended

Posted Dec 7, 2010 @ 12:53 pm by
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By Lindsay Beyerstein,  Media Consortium Blogger

Congressional Republicans and the White House  struck an agreement in principle on Monday night to extend all the Bush tax cuts for 2 more years in exchange for extending unemployment benefits. The GOP agreed to the so-called “Lincoln-Kyl compromise” a partial 2-year extension of the Bush estate tax cuts on estates worth over $5 million. If the deal had not been struck, estate taxes on estates over $5 million would have gone back up from 0% to the pre-cut rate of 55%. Instead, the rate will be 35% for the next 2 years.

The GOP also agreed to a short-term “stimulative” 2 percentage-point cut off the 6.2% payroll tax we all pay on income up to $106,800. The good news is that a payroll tax holiday will provide the most noticeable tax relief to low- and middle-income Americans. The bad news is that payroll taxes fund Social Security, so cutting the tax means starving a program that most directly benefits average people. Social Security is not in crisis yet, but steps like these could push the program into worse financial straights where significant benefit cuts become inevitable. It’s almost as if the GOP, having failed to spark panic about an as-yet non-existent Social Security crisis, is determined to engineer one.

All these gimmes for the rich were the price of a partial extension of unemployment benefits. The stakes couldn’t have been higher. If Congress had failed to act, 2 million people stood to lose their benefits this month and another 7 million would have run out before the end of next year, reports Andy Kroll of Mother Jones.

Meanwhile, unemployment continues to rise. The economy only added 39,000 jobs in November when analysts were expecting about 150,000. “At the beginning, some people just thought it was a printing error,” said reporter Motoko Rich on the New York Times‘ weekly business podcast. The overall unemployment rate climbed to 9.8%.

At ColorLines, Kai Wright argues that the time has come for President Obama to seize the opportunity to debunk conservatives’ bad faith arguments for tax cuts above all else:

At the same time, the anti-government crowd’s political hand—if forced—has never been weaker. A depressingly large number of middle-class and working-class Americans now know all too well what economists have long understood: You get a great deal more economic bang out of keeping lots of people from becoming destitute than you do by helping a few people horde wealth. People remain enraged about the no-strings-attached bank bailout, for instance, because they intuitively understand its ramifications. Wall Street is now enjoying a narrow, taxpayer-financed recovery while unemployment, hunger and poverty all continue climbing through the former middle class.

Extending UI makes sense

Tim Fernholtz of TAPPED tackles some of the bad arguments against extending unemployment insurance. Economist Greg Mankiw claims that extending unemployment insurance is just a surreptitious ploy to redistribute income to the poor from the wealthy. Actually, as Fernholtz points out, the point of a UI safety net is to prevent people, 3 million of them in 2009, from becoming poor in the first place. Poverty is very expensive for society at large. If we can keep the unemployed in their homes, spending their benefits in their communities, we can keep the socially corrosive effects of poverty at bay until the economy improves. The social costs of child poverty alone have been estimated at $500 billion a year, Fernholtz notes. The deeper we allow people to sink into poverty, the more difficult it will be for the economy to rebound. On this view, UI is a shared investment in a well-ordered society, not just a lifeline for jobless families.

Why corporate tax cuts won’t create jobs

Jack Rasmus of Working In These Times explains why tax cuts will not create jobs. Simply put, banks and big companies are sitting on over a trillion dollars. Among the nation’s biggest banks, lending to small and medium size businesses, the engines of job creation, has dwindled over 2009 and 2010. America’s biggest companies are sitting on a hoard of $1.84 trillion dollars, which they are not investing in job-creating projects. The Deficit Commission recommended slashing corporate taxes, ostensibly to spur investment and job creation, which would ultimately generate taxable income to help balance the budget. As Rasmus points out, this wishful thinking is predicated upon the assumption that if only corporations had more money, they would invest it to create jobs. The fact that companies are already sitting on huge piles of cash suggests that shoveling more moolah on the pile won’t change the basic dynamic. Perhaps companies are waiting to invest because they know that consumers aren’t keen to buy goods and services when they are unemployed or fearing job loss.

Economic disobedience

At In These Times, Andrew Oxford interviews sociologist Lisa Dodson about her new book on getting by in the low-wage economy. Her research shows that as economic instability mounts, many Americans are quietly taking matters into their own hands:

To understand how fair-minded people survive in an unfair economy, Dodson interviewed hundreds of low-wage workers and their employers across the country, examining what she terms the “economic disobedience” now pervasive in the low-wage sector. From a supervisor padding paychecks to a grocer sending food home with his employees, these acts of disobedience form the subject of her latest book, The Moral Underground: How Ordinary Americans Subvert an Unfair Economy.

Winner-take all economy

In an interview with Democracy Now!, Yale political science profesor and  Jacob Hacker explains why the Deficit Commission has it all wrong when it comes to tax cuts vs. unemployment benefits.

Hacker studies inequality. He has written a book on how the richest Americans cornered an unprecedented share of the country’s wealth for themselves over the past three decades. The richest Americans have never been in a better position to help the country grapple with the deficit. Yet, as Hacker points out, the Deficit Commission wants to balance the budget on the backs of middle- and lower-income Americans by cutting spending on programs that disproportionately benefit working people and readjusting the tax code to make it even more favorable to the rich.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: A Progressive Deficit Fix?

Posted Nov 30, 2010 @ 11:58 am by
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Creative Commons, Flickr, Breakmouldby Lindsay Beyerstein, Media Consortium blogger

The co-chairs of the 18-member deficit commission issued a preliminary presentation two weeks ago that favored tax breaks for the wealthy and left open the possibility of deep cuts to Social Security, Medicare and other social programs. But there’s still time for the commission to radically reshape its message before it issues its final report.

Jan’s plan

That’s exactly what progressive Rep. Jan Schakowsky (D-IL) is trying to bring about. Schakowsky is a member of the commission and she has an alternative, progressive plan to rein in the deficit, as David Moberg reports for Working in These Times:

It would not go into effect until 2015 or after unemployment subsides, and it provides for $200 billion of job-creating investments during the next two years, in addition to reducing the deficit by $441 billion in 2015, nearly double Obama’s target. Slightly more than a third of Schakowsky’s proposed deficit reduction would come from new revenue (mostly tax changes hitting the wealthy and corporations but also from cap-and-trade carbon emission controls), 30 percent from ending or reforming tax expenditures (again, mainly benefiting rich taxpayers), a quarter from defense cuts, and 9 percent from mandatory programs (like offering a public option for health insurance and requiring Medicare to bargain over drug prices). Though Social Security does not contribute to the deficit, Schakowsky plans to secure future payouts without benefit cuts by increasing how much the wealthy pay into the retirement program.

A public option for health insurance would keep rising health care costs in check because insurers would have to compete with non-profit, government-administered insurance. Instead of cutting Social Security benefits for the needy, Schakowsky would simply eliminate the arbitrary payroll tax ceiling on high earners. Sounds like common sense, doesn’t it?

A coalition of progressive groups calling itself Our Fiscal Security unveiled its own alternative proposal for cutting the deficit on Monday, Luke Johnson reports for the Colorado Independent. Key planks of the platform include repealing the Bush tax cuts, reinstating the estate tax for married couples with assets greater than $4 million, and capping itemized deductions at 15%. Coalition members include Demos, the Century Foundation, and the Economic Policy Foundation.

Generation Recession

Young adults have the highest unemployment rate of any demographic. At the National Radio Project, Rina Palta examines the impact of joblessness on the nation’s 80 million “Millennials.” (Audio) Palta talks to young people who are weathering their first layoffs mere weeks or months after landing their first professional jobs.

Mark Kirk: Tax Cuts for the Rich “No Matter What”

The day before 2.5 million Americans stand to lose their unemployment benefits, Sen. Mark Kirk (R-IL) went on TV to insist that unemployment insurance is misguided and that the government must cut taxes for the rich “no matter what,” Julianne Escobedo Shepherd reports in AlterNet.

Oddly enough, Kirk fancies himself a moderate by Republican standards, according to Steve Benen of the Washington Monthly. Kirk believes that extending unemployment insurance would “just add to the deficit.” In fact, as Benen notes, extending unemployment benefits would be a very efficient way to infuse billions of dollars into the economy. Unemployed people will spend their extended benefits on food, gas, rent, and other necessities. That money doesn’t just disappear into the ether, it feeds local businesses, who in turn keep other Americans working.

The Republican Party line is that the rich need tax cuts because they create jobs. If tax cuts for the rich created jobs, we should already have a full employment economy. As the Bush tax cuts are set to expire, taxes for the rich are at all time lows and unemployment is at historic highs. It is crazy to assume that allowing these tax cuts to continue will magically produce jobs that have yet to materialize, or even bring back the jobs that have disappeared since the Bush tax cuts went into effect.

Ireland’s Billion Dollar Bailout

Over the weekend, the world’s financial institutions agreed to spend $90 billion to bail out Ireland. Tim Fernholz of TAPPED worries that this sum is too small to bring Ireland back from the brink of its sovereign debt crisis. He argues that the world financial community is making the same mistake it made in the 1990s when it forced debtor nations into fiscal austerity without forcing creditor nations to restructure their loans on more sustainable terms.

Once again, bondholders are being spared while Irish taxpayers are being expected to shoulder the heaviest burdens. The economic argument for saving the bondholders is that a bond is an ironclad promise, and that if you start expecting bondholders to accept less than 100% of what was promised to them (no matter how ill-advised they were to take that promise), the entire system will fall apart. It’s ironic that the promises that governments make to their citizens are endlessly renegotiable while bond deals are ironclad. Worldwide, citizens outnumber bondholders. Having citizens lose faith in their government seems far more dangerous than expecting bondholders to take a haircut.

 

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: Your Vote, Your Economy—Why Today’s Election Matters to Your Pocketbook

Posted Nov 2, 2010 @ 11:44 am by
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by Lindsay Beyerstein, Media Consortium blogger

Election Day is finally here, and control of the House and the Senate hangs in the balance. The differences between parties could not be more stark. Republicans have promised to repeal health care reform and slash government spending for social programs, all while preserving tax cuts for the wealthiest Americans. Some of the more radical ideas bandied about this election season—by conservative candidates with a decent shot at winning—include privatizing social security and eliminating the Department of Education.

Anti-tax ballot measures

Josh Holland of AlterNet runs down the most economically important ballot initiatives facing the electorate today. Some of these measures could cripple states for decades to come.

For example, Coloradans are voting on a spate of radical anti-tax amendments including Amendment 60, which would eliminate all property tax increases passed since 1992 and halve property taxes over the next decade. If Initiative 1053 passes in Washington State, any future hikes in taxes or fees would have to be approved by a 2/3rds majority of legislators or by voters. In tough times, the promise of preempting tax increases may seem attractive, but those entranced by the 2/3rds rule should look to California as a cautionary tale. The state is structurally in the red because legislators can pass spending bills by simple majority but they need a 2/3rds majority to raise taxes. (more…)

Weekly Audit: Why Do Deficit Hawks Hate Social Security?

Posted Aug 31, 2010 @ 10:25 am by
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by Zach Carter, Media Consortium blogger

Image courtesy of Flickr user law_kevin, via Creative Commons LicenseLast week, Social Security advocates learned something they had long suspected. Arguments for cutting Social Security aren’t really about economics or the deficit. They’re all about waging war on social services.

In short, some very prominent policymakers are out to dismantle Social Security on ideological grounds. The most recent example of this view comes from Alan Simpson, a former Republican Senator from Wyoming who now serves as co-Chair of President Barack Obama’s Federal Debt Commission. Earlier this summer, Simpson was caught on video spreading absurd lies about Social Security, but his latest outburst explains why he’s been so willing to distort the facts. Simpson simply hates Social Security.

As Joshua Holland highlights for AlterNet, Simpson fired off a nasty email to Ashley Carson, who advocates for elderly women, in which he referred to the most successful social program in U.S. history as “a milk cow with 310 million tits.” (more…)

Weekly Audit: Foreclosure Mills, Social Security and the Fed’s Failures

Posted Aug 10, 2010 @ 11:32 am by
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by Amanda Anderson, Media Consortium blogger

Image via Flickr user bitzcelt, via Creative Commons LicenseEditor’s Note: Zach Carter is out this week, but we’ve compiled a rundown of the biggest economy-related stories, including the rise of foreclosure mills and why social security isn’t in jeopardy. Zach will be back next Tuesday, so stay tuned!

Who needs ethics when you’ve got foreclosure mills?

Want to make money quickly, but don’t want ethics to get in the way? Big banks are outsourcing their foreclosure duties to fraudulent law firms, known as foreclosure mills, and getting away with it. Zach Carter explains the latest get rich quick scheme for AlterNet. Foreclosure mills are ethically questionable law firms that process legal documents for foreclosures. They tend to have an emphasis on quantity, not quality. Carter writes:

Big banks are not outsourcing their foreclosure processing to shady law firms with a history of breaking the law for a quick buck. These foreclosure scammers forge documents, backdate signatures, slap families with thousands of dollars in illegal fees and even foreclosure on borrowers who haven’t missed a payment. (more…)

Weekly Audit: Financial Reform Makes Headway, Jobs And Social Security In Jeopardy

Posted Jun 15, 2010 @ 9:18 am by
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by Zach Carter, Media Consortium blogger

Image courtesy of Flickr user Jay_D, via Creative Commons LicenseTwo critical Wall Street reforms, once declared dead by U.S. megabanks, are suddenly close to Congressional approval. As the House and Senate iron out the differences between their financial overhauls, it now appears that lawmakers are finally willing to ban banks from gambling with taxpayer money by implementing a strong Volcker Rule, and to end taxpayer subsidies for risky derivatives operations.

These reforms will help stabilize the U.S. economy by clamping down on the naked speculation the drove financial markets off a cliff in 2008. But while lawmakers are finally waking up to the economic and political necessity of strong Wall Street reforms, conservatives have blocked key efforts to ease unemployment. President Barack Obama also appears ready to surrender to an assault on Social Security later this year. (more…)

Weekly Audit: Deficit Reduction = Selling Out to Wall Street

Posted Jun 8, 2010 @ 10:35 am by
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by Zach Carter, Media Consortium blogger

 

Image courtesy of Flickr user epicharmus, via Creative Commons LicenseIn the fall of 2008, decades of finance-first, bankers-know-best economic policies coalesced to create one of the worst economic crises in history, one that the banks themselves could not survive without staggering levels of government support.

 

Yet astonishingly, nearly two years after the crash, Wall Street is still setting the economic agenda in Washington. As Congress begins to examine broader economic policy, lawmakers are under heavy Wall Street pressure to reduce the federal budget deficit—even though that could mean deepening the jobs crisis without any substantive economic benefits. (more…)