Bryce Covert

Editor

Recent Posts by Bryce Covert

  • Changes at Next New Deal

    Apr 5, 2013Bryce Covert

    Today marks my last day as Editor of Next New Deal. I’ll be starting a new role as Economic Policy Editor at ThinkProgress starting April 15th. (The coincidence is not lost on me that it’ll be tax day.)

    Today marks my last day as Editor of Next New Deal. I’ll be starting a new role as Economic Policy Editor at ThinkProgress starting April 15th. (The coincidence is not lost on me that it’ll be tax day.)

    I’ve had the pleasure to edit this blog for three years. I began when it was New Deal 2.0 and oversaw its transformation both visually and in name to Next New Deal early last year. It was through editing this blog that I developed a real passion for progressive economics and the need for a strong anti-deficit hawk, pro-investment and growth chorus in the national discussion. I forwarded this mission with my weekly column on consumer debt and income inequality, The Swipe, by keeping a close eye on the predatory banking practices that ensure consumers are loaded with debt as well as the larger forces that have led to paltry income growth (if any) at the bottom of the economic ladder, which pushes people to turn to debt in the first place. I also developed my current focus on gender and economics through my writing for the blog.

    Since I began, Next New Deal’s social media presence has blossomed: our Facebook and Twitter accounts grew from a couple hundred followers to well into the thousands. We integrated Mike Konczal’s brilliant blog Rortybomb and fostered a new generation of voices through the Campus Network’s section of the blog, Millennial Pulse. Rediscovering Government maintains an ongoing conversation about the important role government plays in our economy on its section of the blog. The Daily Digest, our morning round up of the day’s economic news with a witty spin, is now so popular that Daily Kos reposts it every day for its millions of readers to consume.

    I’m excited about my next step, where I’ll devote even more of my energy to writing about progressive economic policy. And I know this blog will be in excellent hands. Tim Price, Daily Digest writer extraordinaire and former Deputy Editor of Next New Deal, will oversee it, and all of the Roosevelt Institute’s thinkers will continue to share their important ideas. Thank you all for reading, and stay tuned for even more fantastic content.

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  • Caught in a Credit Catch-22: Obstacles and Opacity in an Industry We All Rely On

    Jan 2, 2013Bryce Covert

    One person's story shows how the credit system is still rigged and boobytrapped.

    One person's story shows how the credit system is still rigged and boobytrapped.

    My (early) New Year’s resolution was to get a credit card. You may remember that I have never had a credit card. And thus if I were on the dating market, my OKCupid inquiries would be flatly rejected. It’s not that I have a bad score. I just don’t have one. I had a good score when I was dutifully paying off my student loan after I graduated, but then through paying dirt-cheap rent in Harlem and never paying for cable I was able to pay off the loan. Since then I haven’t owned any credit products. I’ve paid my rent on time every month and paid every bill before the due date. But those things don’t make their way over to FICO. I’ve thus landed myself in quite the Catch-22 that speaks volumes about the lending industry and our reliance on it.

    When I moved into a new apartment three years ago, I still had a score, so when the broker ran a credit check on me, she handed me the keys without a complaint. In the intervening years, however, the student loan must have fallen off my history, leaving a gaping void in its place. This is so unusual that when I was applying for a new apartment this summer, the broker told me there must be something wrong with my account. It turned out nothing was wrong – I just literally don’t have a score.

    Because I was dealing with humans in both the broker and the landlord, I was able to explain to them that I don’t have a score because I don’t like being in debt. At all. On top of that, I can show steady income because I have the good fortune of being employed at a well-paying job. They agreed that made sense and gave me the keys. But the ordeal made me realize that if I were to deal with an institution instead of a human – a bank from which I want a mortgage, say, or even a real estate management company instead of a landlord – I would probably be screwed. So I decided to suck it up, sell out, and finally get my first credit card.

    It turns out I was screwed earlier than I thought. Back when I had a fantastic credit score, I would get credit card offers in the mail by the dozens. So I decided to do the responsible thing and do some research on a good rewards card (might as well get something out of my sell-outery) that doesn’t have an annual fee and has a decent APR. Having found one, I filled out the online application and waited to hear that my soul had been sold. Not so fast: I was rejected on the spot. It turns out that not having a credit score is just as bad as having a damaged one in the short-term. The bank has no reason to trust that I can handle credit, so it won’t give me any. Which means I will continue to be denied credit and continue to have zero credit history.

    There was a big part of me that wanted to continue my protest of the financial system that demands you borrow money and go into debt (even if only a month at a time) to participate. But this problem will only get worse. What if the next time I move the landlord isn’t understanding? Worse, what if the next job I apply to runs a credit check on me and decides having no history is too suspicious? (Six out of ten employers vet employees via a credit report.) Despite the fact that I have steady income and pay all my bills on time, I could still be left homeless and unemployed because of my refusal to get a credit card.

    The point of this story is not my particular case. I am incredibly privileged to have a job, a steady paycheck I can comfortably live off of, and a landlord who was willing to let me move in and pay her ridiculous New York rent. One point is that if things are this difficult for middle class me, they are 10 times worse for low-income people. Nearly 10 million households in the U.S., or one in 12, are unbanked, meaning they have no relationship with a formal banking institution. Half of them don’t have a bank account because they don’t think they have enough to make the minimum balance. This isn’t surprising, given that over 70 percent of this population makes less than $30,000.

    I have the benefit of a bank account with enough money to keep the required minimum balance. Given that, I will likely be able to coerce a credit card out of my banking institution (even if I have to pay an annual fee to do so and put down a security deposit). The unbanked community, however, must usually turn to “alternative” products such as pre-paid debit cards, payday lenders, and check cashers. These are all relatively predatory products that come loaded with fees and high interest. Interest rates on payday loans, for example, can reach 450 percent when annualized. When you’re already pulling in just enough – or not enough – to get by, losing even more money simply to access your own income is a huge problem. Beyond that, if someone who is unbanked tries to return to the traditional banking industry, he or she will probably encounter far more obstacles than I’ve run into. It could become impossible, shutting these people out of the entire traditional lending industry and all that comes with it.

    The other point is the infuriating opacity of the whole credit industry. I had no idea that I don’t have a score until a hard inquiry was run on me – something that in and of itself can harm your score or at the very least ward off potential lenders. Perhaps more frustrating, the hard inquiry that’s generated by applying for a credit card looks pretty fishy when you don’t get accepted for a card – because then I have to apply for another, which is another inquiry, and if I get rejected I have to do another, and on, making it look (rightfully, I suppose) like I’m going door to door and being turned away by everyone. That makes a lending institution wary of taking me on. But I have no way to know ahead of time whether I’ll qualify for a particular card. Even my bank, which I’ve been with for over 10 years, couldn’t tell me whether my loyalty or good explanation for my blank credit history would help me out. I was flatly told that the only way to know if I’ll be accepted for a particular card is to apply and find out. Bank employees are barred, I was told, from telling me the criteria used so that they won’t “discriminate” against me by pushing me toward the credit product I’m more likely to qualify for.

    Yet this lack of transparency on the bank’s part is nothing compared to the credit reporting companies themselves. The methodologies these private companies use to calculate scores are a closely guarded secret. Even though an estimated 20 percent of scores contain errors, attempts to resolve them often end in frustration and inaction. The score you buy from the agencies often isn’t the one a lender would see. And until the Consumer Financial Protection Bureau came along, they were barely regulated – although the bureau is already overseeing the largest ones and is currently fielding consumer complaints.

    I’m glad that the CFPB now exists and should bring more regulation and transparency to the whole ordeal by cracking down on non-bank lenders, overseeing credit reporting agencies, and demanding better practices from credit card lenders. But one thing it won’t do is sever the ironclad link between taking on debt and participation in the finance industry. Even if these products improve, I’ll still have to convince someone to give me a credit card – a product I have never wanted – so that I can be sure of housing and employment. 

    Bryce Covert is Editor of Next New Deal.

    Credit card swipe image via Shutterstock.com.

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  • Obama Can Thank Women Voters By Supporting Real Economic Equality

    Nov 15, 2012Bryce Covert

    As part of our series "A Rooseveltian Second Term Agenda," a way to recognize the economic needs of the women who helped re-elect President Obama.

    As part of our series "A Rooseveltian Second Term Agenda," a way to recognize the economic needs of the women who helped re-elect President Obama.

    Both candidates spent a lot of time and energy courting women’s votes this cycle. But as predicted, the gender gap yawned on Election Day and pushed Obama to victory with a 10-point gender gap between him and Romney. How can President Obama thank the women who voted for him as he starts shaping the agenda for his second term? There are a variety of general economic policies that will benefit everyone, including women, such as spending federal stimulus money to kick-start a sluggish economy, ensuring the jobs being created in the recovery pay enough to support workers and their families, and bolstering a failing safety net to support the most vulnerable among us.

    But while women hold down half of the jobs in our economy, they still face unique challenges and obstacles to full economic equality. If President Obama cares about women’s economic welfare as much Candidate Obama indicated, there are some important issues he can take on in the next four years.

    1. Truly equal pay for equal work: President Obama often talks about the fact that the first bill he signed into law was the Lilly Ledbetter Fair Pay Act, which helps address the gender wage gap. The act gives women more time to file a claim alleging discrimination since the truth may take a long time to surface. But while the act gets talked about like a panacea, it’s far from it. The number of pay discrimination complaints filed with the EEOC fell since the signing of the act while the pay gap widened. This is because the gap is caused by a complex array of factors: occupational segregation, hostile courts, and plain old discrimination. A first step to supplement the Lilly Ledbetter Act would be prohibiting salary secrecy, forcing employers to allow employees to talk about their pay with each other, something half of all workers cannot currently do. It will be next to impossible for women to address discrimination if they don’t even know it’s happening. But we also have to talk about how to move women into nontraditional fields, appoint judges to the courts that will stand by women when they sue for discrimination, and raise pay for the service sector jobs that women already dominate. These are large issues, but without putting them on the agenda they’ll continue to hamper women’s equality.
    1. Paid time off to care for family: We are one of just three countries among 178 that doesn’t guarantee any paid maternity leave benefits. Fifty countries go further to offer leave for fathers. Among the 15 most competitive nations, we’re the only one that doesn’t have a paid sick days policy. The reality is that the work of caring for children – when they’re very young, sick, or not in school – still falls mostly to women. Yet they can still lose their jobs when they need to miss work for this important caretaking. And without offering paid benefits, we force many women to take on debt or go hat in hand to loved ones and friends to get through. Not only will paid family leave benefit women, it will benefit men and help to change the care work equation. Men are more likely to take time off to be with a new child if the leave is paid – unsurprisingly, since families have such a hard time financing the lost income. And when men do take leave, they become more involved in their children’s lives. Universal, paid leave policies improve quality of life for all workers while leveling the playing field for women.
    1. Significant support for child care: There are two sides to child care. On one are those who need help caring for family and as mentioned above, they are almost entirely women. On the other are the caregivers, also almost entirely women. Our support for child care is pretty dismal and getting worse. The cost of putting two children in center care exceeds median rent in all 50 states. At the same time, the majority of states have pulled back on child care assistance for two years in a row. The Child and Dependent Care Tax Credit that gives parents who are paying for child care a tax break has only increased once in the last 28 years. The government needs to invest heavily in supporting working parents, men and women alike, with skyrocketing child care costs, allowing all who can and want to go to work to leave their children with quality caretakers. This is also a way to begin ensuring that these caretakers are well paid. In a national survey of in-home child care providers, the most common answer to how much they make in a week is $500, or $26,000 a year – a pitiful amount, not to mention that many don’t receive any benefits. Given how much families struggle with the cost and how many domestic workers don’t make enough to live on, the government must step in.

    American women have flooded the labor market in the last half-century. But our economy and society haven’t changed enough to meet them halfway. President Obama won’t be able to fix all of these problems in his second term. But he can begin to address them and put a spotlight on these societal problems that we still think of as private concerns. I’m sure women voters would be grateful.

    Bryce Covert is Editor of Next New Deal.

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  • Daily Digest - October 26: Separate and Unequal

    Oct 26, 2012Bryce Covert

    Some Are More Unequal Than Others (NYTimes)

    Roosevelt Institute Senior Fellow Joseph Stiglitz writes that on one side of the presidential contest we have someone who understands rising inequality even if he hasn't done everything he can to stem the tide, and on the other someone who just wants you to stop talking about it.

    Some Are More Unequal Than Others (NYTimes)

    Roosevelt Institute Senior Fellow Joseph Stiglitz writes that on one side of the presidential contest we have someone who understands rising inequality even if he hasn't done everything he can to stem the tide, and on the other someone who just wants you to stop talking about it.

    Conservative Inequality Denialism (TNR)

    Timothy Noah adds that the right doesn't feel comfortable calling the have-nots outright lazy anymore, so they just cover their eyes since that means the poor don't exist.

    Romney's Economic Model (NYTimes)

    We don't have to speculate about what a Romney economy would look like, writes Nicholas Kristof. We have a real life example: the Europocalypse.

    Paul Ryan: No, I Want to Help the Poor! Really! (New York)

    Ryan may be trying to pinky swear low-income Americans that he's got their back, but Jonathan Chait points out that his plan for them is: 1. slash the social safety net, 2. ???, 3. social mobility!

    Why Freddie Mac Resisted Refis (ProPublica)

    Jesse Eisinger goes behind the scenes at the mortgage giant to find out that board members didn't want to help struggling homeowners because it might have eaten into their profits. It also might have helped the economy, which would have been terrible for everyone.

    Living Near Foreclosures Has Cost Homeowners Almost $2 Trillion (Think Progress)

    Think about how much you hate your neighbors for playing loud music and letting their dog poop on your yard. Now imagine that they're instead costing you trillions of dollars.

    The Dirty Secret of Debt-Hating CEOs: They Need Big Deficits to Live (The Atlantic)

    The leaders of our biggest corporations may denounce debt during the day, but once night falls they can be seen running to the Treasury to suck on the economy's life essence.

    Romney's 9-Point Plan to Annihilate Unions (In These Times)

    Workers may not come up nearly as much as small business owners with Republicans, but Romney and Ryan haven't forgotten them. They'll liberate them from the crushing grip of unions fighting to hold onto the 40-hour work week.

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  • Want to Improve America’s Education System? Desegregate It

    May 24, 2012Bryce Covert

    A solution for our poor educational ranking and huge achievement gap is staring us in the face.

    A solution for our poor educational ranking and huge achievement gap is staring us in the face.

    America’s educational system is pretty bad at serving its students. Even Mitt Romney thinks so. In a speech yesterday, the presidential candidate called education “the great challenge of our time” and “the civil-rights issue of our era,” pointing out that minority children get screwed the most. The numbers behind his sentiment are pretty stark: in the OECD’s report on educational achievement among 70 countries, the U.S. falls almost in the middle, ranking 24th in reading, 30th in science, and 32nd in math.

    With numbers like those it would make sense for the country to try whatever it could to improve learning for our kids. But we’re throwing out one method that has proven to have clear advantages: desegregation.

    In an op-ed over the weekend, David L. Kirp explained the research behind this idea. As he notes, “economists’ studies consistently conclude that African-American students who attended integrated schools fared better academically than those left behind in segregated schools.” Those children were more likely to graduate from high school and college. And it wasn’t a zero sum game in which white children fell backward as black children moved up. “Between 1970 and 1990, the black-white gap in educational attainment shrank — not because white youngsters did worse but because black youngsters did better,” he writes.

    Yet the achievement gap has been yawning in recent years. As of 2007, white students were scoring an average of 26 points higher than black students in every subject. We may look to the fact that schools have become increasingly segregated. There’s purposeful re-segregation, as in the recent policy changes in North Carolina. One school district eliminated a busing program in 2002 and another is set to follow. Meanwhile, the Wake County school board struck down its program that integrated schools based on socioeconomic status. Or take the less deliberate example of New York City. While the public school population is as diverse as the city’s, about 650 of its 1,700 schools have populations that are 70 percent a single race, according to the New York Times’s analysis. More than half are at least 90 percent black and Hispanic.

    So no time like the present to re-desegregate our school systems in order to raise educational achievement. If we want to work on how we stack up against other countries, we would do well to consider it as a strong option in our arsenal.

    The effects can go beyond test scores. Kirp notes that the positive effects of desegregation stayed with children throughout their lives. One study showed that “black youths who spent five years in desegregated schools have earned 25 percent more than those who never had that opportunity." That’s good for the rest of the economy. And unlocking educational potential for those who don’t happen to be white will also boost it. In fact, a new paper says that as much as 20 percent of growth in American productivity over the past 50 years can be attributed to increased equality for black people and women. It makes sense: by letting a diverse array of people compete in the workforce, you’re more likely to find the most talented for the job.

    Sometimes our educational failings can seem large, complicated, and impossible to solve. Many of them are. But the solution of going back to purposefully desegregating our schools is staring us in the face.

    Bryce Covert is Editor of Next New Deal.

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