Daily Digest - February 19: Can Housing Reform Turn Back the Clock?

Feb 19, 2015Rachel Goldfarb

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Set the Wayback Machine for Housing Finance Reform, But to When? (CLS Blue Sky Blog)

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Set the Wayback Machine for Housing Finance Reform, But to When? (CLS Blue Sky Blog)

Roosevelt Institute Senior Fellow Brad Miller lays out the history of Fannie Mae and Freddie Mac to argue for a stronger government role in creating a safe and affordable mortgage market.

A Labor Dispute Slowed America’s Ports to a Halt. But There’s an Even Bigger Problem. (WaPo)

Lydia DePillis looks at the problems facing West Coast ports that go beyond current labor disputes. Increased traffic through the ports has also slowed everything down.

Fed Officials Sound Cautious Note on Raising Interest Rates (NYT)

Binyamin Appelbaum reports on the notes released from the Federal Reserve's January meeting, which acknowledge concerns about the fragility of economic growth.

Bernie Sanders, Mulling Presidential Run, Adopts Novel Stance on Deficit (AJAM)

Ned Resnikoff says that Senator Sanders's discussion of the deficit as an issue that includes unemployment and inequality draws on a less commonly accepted school of economic thought.

The Wrong Way to Revitalize a City (In These Times)

Rachel M. Cohen argues that ALEC's push against community benefit agreements, which create requirements for publicly-subsidized developers, is the opposite of community-building.

Why Do Americans Feel Entitled to Tell Poor People What to Eat? (The Nation)

Unlike other government programs that people benefit from, like student loans and mortgage deductions, EBT cards are highly visible, creating opportunities for judgment, writes Bryce Covert.

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Daily Digest - February 12: Populism Won The Day

Feb 12, 2015Rachel Goldfarb

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How Democratic Progressives Survived a Landslide (TAP)

Bob Moser says that populist, localized campaign messages, not the party's own turnout strategy, saved a few key Democratic races in the 2014 midterm elections.

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How Democratic Progressives Survived a Landslide (TAP)

Bob Moser says that populist, localized campaign messages, not the party's own turnout strategy, saved a few key Democratic races in the 2014 midterm elections.

  • Roosevelt Take: Moser references Roosevelt Institute Senior Fellow Richard Kirsch's post-election analysis on winning populist messaging.

What ‘Audit the Fed’ Really Means – and Threatens (WSJ)

Robert Litan explains that Senator Paul's proposal calls on Government Accountability Office economists to go outside their expertise to report on the Fed's activity and minimize its independence.

Payday Loans Are Bleeding American Workers Dry. Finally, the Obama Administration Is Cracking Down. (TNR)

Danny Vinik breaks down how payday loans harm consumers: the initial loan might not be so bad, but the repeated roll-overs have a high cost. Limiting those roll-overs is one potential regulation.

The “War on Women” is a Fiscal Nightmare: Taxpayers on the Hook for Millions as Republicans Gut Family Planning (Salon)

Katie McDonough looks at Kansas as an example of where legal fees to fight for potentially unconstitutional abortion restrictions and cuts to family planning services create massive costs.

Is Republican Concern About Middle-Class Wage Stagnation Just a Big Con? (MoJo)

Kevin Drum doesn't think this is a sign of Republican reformers succeeding in shifting the party in a populist direction, and says that the more likely explanation is an attempt to defuse Democrats.

New on Next New Deal

The Politics of Responsibility – Not Envy

Roosevelt Institute Senior Fellow Richard Kirsch argues that voters are responding not to envy, but to the knowledge that everyone needs to take a fair share of responsibility for shared prosperity.

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Daily Digest - February 11: How Can Small Donors Gain Big Influence?

Feb 11, 2015Rachel Goldfarb

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Our partners at As You Sow are hosting a webinar on excessive executive compensation tomorrow at 2pm EST. Register here.

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Our partners at As You Sow are hosting a webinar on excessive executive compensation tomorrow at 2pm EST. Register here.

Big Money Can’t Buy Elections – Influence is Something Else (Reuters)

Roosevelt Institute Senior Fellow Jonathan Soros suggests stronger small-donor matching funds and reforms to the Federal Election Commission to work around Citizens United.

A Better Way to Help the Long-Term Unemployed (The Atlantic)

Alana Semuels asks whether one successful – but relatively expensive – workforce program can be scaled up beyond its current pilots. The high costs make it a tougher sell for federal funding.

Unfriend the Fed: Rand Paul’s Attack Re-examined (WSJ)

Pedro da Costa, with help from some economists, fact-checks a Rand Paul speech on the Federal Reserve and finds the senator's understanding of the Fed and its workings limited.

The Parent Agenda, the Emerging Democratic Focus (NYT)

Nate Cohn sees a theme in the proposals that Democrats are focusing on: childcare, preschool, parental leave, free community college. It's a family-centric agenda that appeals to the middle class.

Will the Recovery Finally Translate into Better Wages? (TAP)

Robert Kuttner looks at the questions that are still in play despite a strong jobs report, including wage growth and when the Fed will decide to raise interest rates.

New on Next New Deal

Building a Better Community: MacArthur-Winning Campus Network Looks to the Future

The Campus Network's members are what earned them a MacArthur Award, writes National Director Joelle Gamble, and the award creates new opportunities to invest in those people.

What Happens if Europe Cuts Off the Greek Banks?

Roosevelt Institute Fellow J.W. Mason argues Greek banks won't collapse without the European Central Bank's support, since Greece's own central bank can maintain internal payments.

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Daily Digest - January 29: Without Food Stamps, How Many Kids Would Go Hungry?

Jan 29, 2015Rachel Goldfarb

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Census Says 16m U.S. Children are Living on Food Stamps, Double the Number in 2007 (The Guardian)

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Census Says 16m U.S. Children are Living on Food Stamps, Double the Number in 2007 (The Guardian)

One in five American children would go hungry without food stamps, writes Jana Kasperkevic, which makes continued Republican efforts to cut the program especially worrying.

The Tax Loophole (Almost) Everyone Should Want to Close (Medium)

James Kwak breaks down the step-up in basis for capital gains loophole and why he thinks it ought to be eliminated: because it's strange that our system rewards dying with unsold assets.

  • Roosevelt Take: In his white paper on tax reform, Roosevelt Institute Chief Economist Joseph Stiglitz also argues against this loophole.

Fed Says It Will Be Patient in Raising Interest Rates, Citing ‘Solid’ Growth (NYT)

Binyamin Appelbaum reports on the Federal Reserve's latest statement and what it will mean for raising interest rates. At this point, rates won't be raised until at least June.

Don’t Mess With Government Giveaways to the Well-Off (WaPo)

Paul Waldman says the uproar over a suggested change to 529 college savings plans shows which welfare programs are safest: those that are open to all, but give most of their financial benefits to the upper-middle class.

Subprime Bonds Are Back With Different Name Seven Years After U.S. Crisis (Bloomberg Business)

Now called "nonprime" mortgage bonds, Jody Shenn says that this time the investment firms that originate the deals plan to retain the bulk of the risk instead of shifting it to other parties.

Obama Is Finally Getting Credit for the Recovery (TNR)

Danny Vinik says that the Republican arguments claiming the recovery happened in spite of the president's policies are falling apart, leaving no other option but to give him credit.

'Housing First' Policy for Addressing Homelessness Hamstrung By Funding Issues (TAP)

Rachel M. Cohen says that "housing first" policies are pretty clearly a more effective way to fight homelessness, but without sufficient funding and housing stock, can't be fully put into action.

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Daily Digest - January 28: Raising Rates is a Rising Challenge

Jan 28, 2015Rachel Goldfarb

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Hard Choices on Easy Money Lie Ahead for Fed Chief (WSJ)

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Hard Choices on Easy Money Lie Ahead for Fed Chief (WSJ)

Janet Yellen's second year as Federal Reserve Chair begins with the difficult task of creating consensus on raising interest rates, write Jon Hilsenrath and Pedro da Costa.

U.S. Companies Cut More Than 1m Jobs a Month. When Did Workers Stop Mattering? (The Guardian)

Suzanne McGee points at large-scale layoffs at big name companies that seek to raise their stock prices as a sign that the U.S. economy no longer sees workers as a worthwhile investment.

You're Probably Richer Than You Think You Are: How Inequality Screws With Our Perspective (The Week)

Jeff Spross says that arguments over proposed changes to college savings accounts demonstrate just how easily some Americans lose sight of how high they sit within the economy.

How Bernie Sanders, In New Role, Could Make Wall Streeters Very, Very Unhappy (TAP)

Ari Rabin-Havt explains how Senator Sanders plans to use his new role as ranking member of the Senate Budget Committee to take on too-big-to-fail and other financial regulatory issues.

Shutting Down New York’s Subways Is Very Expensive (NYT)

If only 10 percent of New York's workforce was unable to work because of the subway shutdown, Josh Barro estimates that the cost in lost labor would be around $160 million.

Al Franken’s Massive New Target: Why He’s Taking on Shady Credit Rating Agencies (Salon)

A major fine for Standard & Poor's shows that Senator Franken's proposal to base credit ratings agencies' compensation on the accuracy of their ratings is still needed, writes David Dayen.

Answering President Obama’s Call, House Introduces Paid Sick Leave Bill for Workers (In These Times)

Kevin Solari reports on the introduction of the Federal Employees Paid Parental Leave Act, one of many ways to expand paid leave in order to attract top talent to government jobs.

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Daily Digest - January 7: Dynamic Scoring Comes to Washington

Jan 7, 2015Rachel Goldfarb

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U.S. House Votes to Adopt Contentious Changes to Cost Estimates (Reuters)

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U.S. House Votes to Adopt Contentious Changes to Cost Estimates (Reuters)

Under new rules passed by the House, cost estimates on fiscal legislation will be measured using dynamic scoring, which could mask the impact of tax cuts, reports David Lawder.

Where Working Women Are Most Common (NYT)

Gregor Aisch, Josh Katz, and David Leonhardt examine data on women's employment rates throughout the country, considering the differing circumstances that lead women to work or not work.

Obama to Pick Former Bank of Hawaii CEO to Be Fed Governor (Bloomberg News)

Cheyenne Hopkins and Jesse Hamilton report that the President will soon announce the nomination of Allan Landon, who has worked at a firm that invests in community banks since 2010.

The Next Big Fight Among Democrats? (WaPo)

Greg Sargent says the next economic fight between populist Democrats in Congress and the Obama administration will be about how much to raise the salary threshold for overtime pay.

  • Roosevelt Take: Roosevelt Institute Senior Fellow Richard Kirsch says these fights between populists and the administration are about the soul of the Democratic party.

Why Is Wage Growth So Slow? The San Francisco Fed Has an Answer (WSJ)

Michael S. Derby looks at new research from the Federal Reserve Bank of San Francisco, which suggests that since employers fired workers rather than cut wages in the recession, hiring will increase before wages do.

The Mortgage Mistake (New Yorker)

James Surowiecki considers the costs of the American emphasis on homeownership and corresponding tax breaks, noting that homeowners' tax breaks don't really help low-income families.

Fair Value Accounting: The Obscure Rule Change That Could Make Student Loans More Expensive (Vox)

Matthew Yglesias explains how changing the method by which government accounts for federal credit programs could have difficult consequences for those seeking student loans and mortgages.

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Let the Fed Lend Directly to Cities and States to Save Taxpayers Billions

Jan 5, 2015Saqib Bhatti

(Updated: 1/5/15) Note: If you like this idea, be sure to vote for it in the Progressive Change Institute's Big Ideas Project. The top 20 ideas will be presented to members of Congress. Voting ends on Sunday, January 11. Click here to vote!

Using our central bank's resources to save cash-strapped local governments from bankruptcy would prevent economic devastation and bring other benefits.

(Updated: 1/5/15) Note: If you like this idea, be sure to vote for it in the Progressive Change Institute's Big Ideas Project. The top 20 ideas will be presented to members of Congress. Voting ends on Sunday, January 11. Click here to vote!

Using our central bank's resources to save cash-strapped local governments from bankruptcy would prevent economic devastation and bring other benefits.

The Federal Reserve should be allowed to make long-term loans directly to cities, states, school districts, and other public agencies so taxpayers can get low interest rates and avoid predatory Wall Street fees. Currently, banks borrow money at near-zero interest rates from the Fed while public entities are forced to pay billions in fees and interest each year. Cities and states should have access to the same low interest rates that banks enjoy so that taxpayer money earmarked for infrastructure improvement and other public goods will no longer be spent subsidizing corporate profits. If the Fed lent directly to cities and states at low interest, it would free up public dollars for services like education and mass transit. Direct loans from the Fed could also help alleviate fiscal crises and become a tool for promoting stronger environmental and labor protections.

Fiscal crises and municipal bankruptcies are typically caused by revenue shortfalls. The definition of "municipal insolvency" is the inability to pay debts as they come due. A city is insolvent and can file for bankruptcy if it is not bringing in enough revenue to be able to pay its bills on time. For example, although there were many political and economic causes for Detroit’s bankruptcy, the technical reason that Detroit went bankrupt was that the city had a $198 million revenue shortfall and could not pay all of its bills. A $198 million loan could have allowed Detroit to avoid bankruptcy. In the future, we can prevent untold devastation if the Fed can provide affordable loans to municipal borrowers.

Detractors will argue that it would be imprudent to use federal taxpayer dollars to make loans to distressed cities and states that might be unable to pay them back. However, the reality is that municipal borrowers in the United States have extremely low rates of default because their debt is ultimately backed by tax revenues. According to Moody’s, one of the three major credit rating agencies in the country, the default rate for municipal issuers that it rates was 0.012 percent between 1970 and 2012. Even though there has been a slight uptick following the financial crisis, the likelihood of municipal default is still virtually nonexistent.

If a municipality defaults on a loan, it is because elected officials made a political decision to default rather than raise taxes. In the case of Detroit, state elected officials in Michigan made that decision by cutting revenue-sharing with the city and prohibiting it from raising additional taxes. The Fed could take proactive steps to address this political problem. For example, it could attach a provision requiring elected officials to raise taxes on large corporations and high-income earners to avoid defaulting on loans from the Fed.

Direct loans from the Fed could also be used to promote fair and sustainable development. Either Congress or the Fed could establish minimum labor and environmental standards that cities and states must abide by to qualify for a loan from the Fed. For example, cities that borrow from the Fed could be required to pay all workers a living wage. Any state that borrows from the Fed for highway repairs could be required to establish stronger fuel efficiency standards for cars. The Fed could also prioritize loans for green infrastructure improvements. This would ensure that direct loans from the Fed support long-term national interests.

Currently, the Fed already has the power to purchase municipal debt securities that mature within six months. In other words, the Fed effectively has the power to lend to cities and states for up to six months, with some caveats. But if Congress were to pass a law allowing the Federal Reserve to make long-term loans directly to cities and states, we could start using our central bank to support the long-term financial, economic, and environmental health of our cities and states. It would allow us to cut Wall Street out of the middle and ensure that our taxpayer dollars are going toward improving our communities instead of padding banker bonuses.

Saqib Bhatti is a Roosevelt Institute Fellow and Director of the ReFund America Project.

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Daily Digest - December 22: Yellen Speaks and the Markets Answer

Dec 22, 2014Rachel Goldfarb

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Markets Bounce After Yellen Announcement (Melissa Harris-Perry)

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Markets Bounce After Yellen Announcement (Melissa Harris-Perry)

As guest host, Roosevelt Institute Fellow Dorian Warren leads a roundtable discussion about how Janet Yellen's statements are impacting the current economy.

Wall Street Is Dismantling Financial Reform Piece by Piece (TNR)

Friday's announced delay of the Volcker rule, which prohibits proprietary trading, shows the financial sector's ability to limit Dodd-Frank's interlocking provisions for its benefit, writes David Dayen.

  • Roosevelt Take: Dayen links to Roosevelt Institute Fellow Mike Konczal's recent piece on Next New Deal with Alexis Goldstein and Caitlin Kline to explain how another rule eliminated in the recent budget negotiations fits into this picture.

Obama Labor Board Comes Down Hard on McDonald’s (Politico)

In a significant first, the National Labor Relations Board has filed legal complaints that hold McDonald's accountable to workers at its franchises, reports Brian Mahoney.

Workers’ Rights at McDonald’s (NYT)

In an editorial, the Times asks McDonald's if it wouldn't be easier to just bargain directly with employees, instead of illegally interfering with the Fight for $15 movement.

Ocwen Head to Resign in New York Settlement (WSJ)

James Sterngold and Alan Zibel report on the settlement between Ocwen Financial Corp. and New York State's financial regulator, which includes $150 million to be paid to housing programs and borrowers.

Obama Compared to Prior Presidents On Job Creation, In Graphs (TAP)

Paul Waldman compares President Obama's job creation numbers to other presidents', and his clearest discovery is that Republicans are wrong: tax cuts won't save the economy, and Democratic policies won't kill it.

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Daily Digest - December 19: It's a Whole New Economic Policy-Making World

Dec 18, 2014Rachel Goldfarb

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Uncharted Interest Rate Territory (U.S. News & World Report)

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Uncharted Interest Rate Territory (U.S. News & World Report)

Jason Gold points out that since interest rates have been declining for 33 years, none of today's lawmakers know quite what they're in for when the Fed begins to raise rates in 2015.

  • Roosevelt Take: Roosevelt Institute Fellow Mike Konczal says that raising interest rates is not the way to fight "financial instability."

The Greatest Tax Story Ever Told (Bloomberg Businessweek)

Zachary R. Mider shares the story of the very first corporate tax inversion, in which a company incorporates abroad to avoid paying U.S. taxes. The idea was invented by a liberal tax lawyer in 1982.

A Big Safety Net and Strong Job Market Can Coexist. Just Ask Scandinavia. (NYT)

The strong safety net programs in Scandinavian countries, which include far more direct aid, might be more effective at getting people to work than the U.S. tax subsidy model, writes Neil Irwin.

How ALEC Helped Undermine Public Unions (WaPo)

Alex Hertel-Fernandez explains that ALEC's attacks on public sector unions aren't new: ALEC-backed anti-union laws were enacted in some states a decade before the Great Recession.

Pro-Warren Protesters Take Their Fight to Wall Street (MSNBC)

Zachary Roth reports on yesterday's protest at Citigroup's New York City headquarters, where protesters denounced the Citigroup-crafted measure weakening Dodd-Frank in the spending bill.

From the E.R. to the Courtroom: How Nonprofit Hospitals Are Seizing Patients’ Wages (ProPublica)

Paul Kiel and Chris Arnold profile the Missouri hospital that sues the most patients in the state. Nonprofit hospitals are required to offer low-cost charity care, but that isn't particularly regulated.

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Daily Digest - December 18: Can Subprime Lending Really Be Safe?

Dec 18, 2014Rachel Goldfarb

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The Return of Subprime Lending (AJAM)

Matt Birkbeck says a new wave of subprime mortgages appear to be following much stricter rules and have far less usurious interest rates, but regulators are still watching closely.

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The Return of Subprime Lending (AJAM)

Matt Birkbeck says a new wave of subprime mortgages appear to be following much stricter rules and have far less usurious interest rates, but regulators are still watching closely.

Paid Maternity Leave Is Good for Business (WSJ)

Susan Wojcicki says that the United States is behind the rest of the world in not offering paid maternity leave to all mothers, and that such a policy makes good sense socially and economically.

Federal Reserve Says It Will Be ‘Patient’ on Interest Rate Timing (NYT)

Binyamin Appelbaum reports on the latest comments from Federal Reserve Chair Janet Yellen about when the Fed will start raising interest rates. The process won't begin before April.

Fired Walmart Worker Says She Had to Choose Between a Paycheck and a Child (The Guardian)

Lauren Gambino and Jessica Glenza profile one former Walmart employee who was still asked to work with dangerous chemicals after her doctor said they would endanger her pregnancy.

What Was the Job? (Pacific Standard)

Kyle Chayka says the gig economy brought with it a massive reinterpretation of what it means to have a job, leaving behind a disenfranchised workforce without any of the benefits it once enjoyed.

New on Next New Deal

Ten Years: Students Moving the Country Forward

Roosevelt Institute Vice President of Networks Taylor Jo Isenberg reflects on the Campus Network's tenth anniversary, and how Roosevelters can continuing pushing for a better country for all of us.

Two Contradictory Arguments That Dodd-Frank is Crony Capitalism

Roosevelt Institute Fellow Mike Konczal compares two mutually exclusive conservative analyses of what crony capitalism means and how to fix it, which suggest this isn't a useful concept in policy debates.

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