Daily Digest - November 21: Costly, Risky Deals Can Be Undone

Nov 21, 2014Rachel Goldfarb

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Teachers Union, Advocates Protest and Ask CPS to Act on Costly Borrowing (Chicago Tribune)

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Teachers Union, Advocates Protest and Ask CPS to Act on Costly Borrowing (Chicago Tribune)

Heather Gillers reports on a rally led by the Chicago Teachers Union, where Roosevelt Institute Fellow Saqib Bhatti urged the mayor to push hard on banks to recoup losses from too-risky deals.

  • Roosevelt Take: For more on this issue, read Bhatti's new report, "Dirty Deals: How Wall Street’s Predatory Deals Hurt Taxpayers and What We Can Do About It."

From Phone Booths to Hot Spots (Medium)

Roosevelt Institute Fellow Susan Crawford praises a new plan to convert New York City's pay phones into high-speed wireless hotspots, which she says would help local businesses immensely.

Facebook’s Shuttle Bus Drivers Seek to Unionize (NYT)

Steven Greenhouse reports on the drivers' reasons for unionizing, which center around their very difficult split-shift schedule and wages that are insufficient for housing near work.

Wall Street is Taking Over America's Pension Plans (The Intercept)

Murtaza Hussain calls Wall Street's funding campaigns in hopes of shifting public pensions to investments that build their profits "the biggest financial story of our generation that you’ve never heard of."

Congress Must Not Let Wind Energy Jobs Blow Away (The Hill)

Michael Brune and Leo W. Gerard call for the renewal of the Wind Production Tax Credit, arguing that wind power isn't just better for the environment, but also has the potential to create thousands of jobs.

Fed’s Dudley Sees Loss of Trust in Banks as Threat to Stability (WSJ)

Senate testimony from the President of the New York Federal Reserve argues that there is a case to be made for splitting up the big banks even now, writes Pedro da Costa.

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Daily Digest - November 20: From the Banks to the Fed and Back Again

Nov 20, 2014Rachel Goldfarb

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New Scrutiny of Goldman’s Ties to the New York Fed After a Leak (NYT)

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New Scrutiny of Goldman’s Ties to the New York Fed After a Leak (NYT)

The leak has led to questions regarding the conflict of interest that arises when people advise the same banks they used to regulate, write Jessica Silver-Greenberg, Ben Protess, and Peter Eavis.

Are Financial Whistleblowers Worth It? Study Says Yes – to the Tune of $21.27bn (The Guardian)

Jana Kasperkevic reports on a new study that proves the value of financial whistleblowers. Rewards encourage whistleblowers to step up, and companies in such cases pay heavier penalties.

Loan Servicer Busted for Backdating, But Foreclosure Victims Say Shenanigans Haven’t Stopped (In These Times)

Ocwen Financial has admitted to a "glitch" involving back-dated loan modification letters, but Joel Sucher says the slow work to fix the problem follows familiar patterns.

Lenders Shift to Help Struggling Student Borrowers (WSJ)

Annamaria Andriotis reports on the plans of two major private student loan providers to lower interest rates, extend repayment periods, and modify loans.

Why It's So Hard for Millennials to Find a Place to Live and Work (The Atlantic)

Derek Thompson explains that cities that provide the best opportunity for economic mobility and cities that have affordable housing hardly overlap at all today.

New on Next New Deal

A Dem Who Can Explain that Fairness is Prosperity Will Sweep in 2016

Roosevelt Institute Senior Fellow Richard Kirsch argues that Democrats who focus on economic policies that emphasize fairness (which are the best ones for economic growth) will succeed.

Leadership Wanted: Governor Cuomo, Homeless Students Need College Support

Roosevelt Institute | Campus Network Leadership Director Kevin Stump proposes a new program to support homeless youth in achieving their college goals.

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Dirty Deals: How Wall Street's Predatory Deals Hurt Taxpayers and What We Can Do About It

Nov 18, 2014

Download the report by Saqib Bhatti.

Download the report by Saqib Bhatti.

The financialization of the United States economy has distorted our social, economic, and political priorities. Cities and states across the country are forced to cut essential community services because they are trapped in predatory municipal finance deals that cost them millions of dollars every year. Wall Street and other big corporations engaged in a systematic effort to suppress taxes, making it difficult for cities and states to advance progressive revenue solutions to properly fund public services. Banks take advantage of this crisis that they helped create by targeting state and local governments with predatory municipal finance deals, just like they targeted cash-strapped homeowners with predatory mortgages during the housing boom. Predatory financing deals prey upon the weaknesses of borrowers, are characterized by high costs and high risks, are typically overly complex, and are often designed to fail.

Predatory municipal finance has a real human cost. Every dollar that cities and states send to Wall Street does not go towards essential community services. Across the country, cuts to public services and other austerity measures have a disparate impact on the working class communities of color that were also targeted for predatory mortgages and payday loans, further exacerbating their suffering.

The primary goal of government is to provide residents with the services they need, not to provide bankers with the profits they seek. We need to renegotiate our communities’ relationship with Wall Street. We can do this by implementing common sense reforms to safeguard our public dollars, make our public finance system more efficient, and ensure that our money is used to provide fully-funded services to our communities. Taxpayers do trillions of dollars of business with Wall Street every year. It is time we start making our money work for us.

Key Recommendations
  • Transparency: Officials should disclose all payments for financial services and conduct an independent investigation of all financial deals to identify predatory features.
  • Accountability: Cities and states should take all steps to recover taxpayer dollars when bank deal unfairly with them, including taking legal action, renegotiating bad deals, and refusing future business.
  • Reducing Fees: Officials should identify financial fees that bear no reasonable relationship to the costs of providing the service and use their leverage as customers to negotiate better deals.
  • Collective Bargaining with Wall Street: Cities and states should agree to a common set of guidelines for an efficient municipal finance system and refuse business with any bank that does not abide by them, creating a new industry standard.
  • Creating Public Options for Financial Services: Cities and states should determine which services they could do themselves more cheaply if they hired the right staff, and make a plan to insource those functions.
  • Establishing Public Banks: Cities and states should establish public banks that are owned by taxpayers, can deliver a range of services, including municipal finance, and provide capital for local investment.

Read: "Dirty Deals: How Wall Street’s Predatory Deals Hurt Taxpayers and What We Can Do About It," by Saqib Bhatti.

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Daily Digest - November 18: Rotten Bank Deals in the Windy City and Beyond

Nov 18, 2014Rachel Goldfarb

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How the Banks Bamboozled Chicago (Chicago Sun Times)

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How the Banks Bamboozled Chicago (Chicago Sun Times)

Roosevelt Institute Fellow Saqib Bhatti explains how banks broke their contracts with the city of Chicago, and how Mayor Emanuel should respond to get that money back.

  • Roosevelt Take: Today, Bhatti releases a new report, "Dirty Deals: How Wall Street’s Predatory Deals Hurt Taxpayers and What We Can Do About It," which examines this issue on a broader scale.

Good Data Make Better Cities (Boston Globe)

Roosevelt Institute Fellow Susan Crawford and Stephen Goldsmith argue in favor of a revamping of data-sharing laws within government, so they protect without limiting collaboration.

Long-Term Unemployment a Sign of Slack, NY Fed Economists Say (WSJ)

The New York Federal Reserve is calling on policymakers to account for the long-term unemployed in their assessment of the economy, writes Pedro da Costa.

That Silence You Hear Is the Sound of Healthcare.gov Working Just Fine (TNR)

Jonathan Cohn says the disparate headlines about how Obamacare is working are all correct: in general, premiums are increasing slowly, but what that means for individual plans will vary.

Number of Homeless Children in America Surges to All-Time High: Report (HuffPo)

A new report calculates that nearly 2.5 million children were homeless at some point in 2013. Lack of affordable housing plays a major role, report David Crary and Lisa Leff.

How Badly Do Republicans Want Tax Reform? (Maybe Not That Badly) (TAP)

Paul Waldman says that if Republicans – or their campaign funders – really wanted tax reform, they'd start writing a proposal regardless of the president's actions on other issues.

And Now the Richest .01 Percent (Robert Reich)

The richest .01 percent of the U.S. now hold a higher percentage of the country's wealth than in 1929, and Robert Reich says they've used it to buy off American democracy.

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Daily Digest - November 14: Strikes on Capitol Hill, the Post Office, and Walmart

Nov 13, 2014Rachel Goldfarb

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Take 5: CTU's Fight Against Risky Financial Deals, Ed Policy Under Rauner (Catalyst Chicago)

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Take 5: CTU's Fight Against Risky Financial Deals, Ed Policy Under Rauner (Catalyst Chicago)

Roosevelt Institute Fellow Saqib Bhatti criticizes the Chicago Public Schools for diving deeper into overly risky financial deals, which he says were misrepresented by the banks.

Capitol Workers Ask Obama for Pay 'More Like Costco and Less Like Walmart' (The Guardian)

Workers who serve meals in the Capitol's dining facilities went on strike Wednesday to protest their poverty-level wages, writes Jana Kasperkevic. This is the first strike of federally contracted workers to include Capitol workers.

Postal Workers to Address Service Cuts at National Rallies (AJAM)

Ned Resnikoff reports on the demonstrations planned for Friday by the American Postal Workers Union, which is protesting cuts that would eliminate jobs and lead to slower delivery.

Walmart Workers Stage Sit-In At California Store Ahead Of Black Friday (Buzzfeed)

Yesterday's first-of-it's-kind protest involved about 25 Walmart workers in Southern California, reports Claudia Koemer, who draws parallels to retail strikes of the 1930s.

The Number of Unemployed Exceeds the Number of Available Jobs Across All Sectors (Working Economics)

Elise Gould says that since unemployed workers outnumber job openings across all sectors, the problem in the labor market must be a broad lack of demand, not a skills gap.

Great News: Lots of Americans Just Quit Their Jobs (Vox)

Danielle Kurtzleben says the sharp increase in the quits rate in September is a sign of economic health, since people don't leave jobs without expecting to find another.

Why Women Should Get the Rest of the Year Off (The Nation)

Bryce Covert quips that since women make only 78 percent of what men make, it's time for women to take a vacation – not just from their jobs, but from the second shift at home as well.

New on Next New Deal

The UNC Coup and the Second Limit of Economic Liberalism

Roosevelt Institute Fellow Mike Konczal says the University of North Carolina's financial aid rules demonstrate how current liberal policy pits the middle class against the poor for access to goods and services.

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Daily Digest - November 12: Cyclical History for Public Service Careers

Nov 12, 2014Rachel Goldfarb

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Selling Fast (Boston Review)

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Selling Fast (Boston Review)

Roosevelt Institute Fellow Mike Konczal reviews three books, using the first, a history of the shift from commission-based public service to salaries, as background for the later two, on recent changes to policing and teaching.

Obama's Net Neutrality Statement Will Start a War on K Street (TNR)

John B. Judis quotes Roosevelt Institute Fellow Susan Crawford, who said the administration had avoided net neutrality for fear of "World War III," but apparently those fears are no more.

More Transparency, More Pay for C.E.O.s (NYT)

Andrew Ross Sorkin reports on a new study proving that compensation consultants, hired by companies to "benchmark" CEO pay to that of their peers, are used to justify higher pay.

  • Roosevelt Take: William Lazonick noted compensation consultants' role in skyrocketing executive pay in his recent white paper.

Voter Suppression Laws are Already Deciding Elections (WaPo)

Catherine Rampell looks at a few close races where the margin of victory lines up with the margin of disenfranchisement. Even if that changed outcomes, there's no real recourse available.

New on Next New Deal

News Flash: Progressives Have a Winning Economic Narrative -- and Democrats Who Used It Won

Roosevelt Institute Senior Fellow Richard Kirsch says Democrats need to focus on a message of an economy that will work for "all of us" in order to win elections.

Expand Registration Efforts on Campus to Increase Youth Turnout

Roosevelt Institute | Campus Network Senior Fellow for Education Megan Ernst looks at how a little-known provision requiring colleges to provide voter registration forms could improve youth turnout.

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Daily Digest - November 7: Big Money Sets the Agenda for Both Parties

Nov 7, 2014Rachel Goldfarb

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Most Expensive Off Year Election in History (Real News Network)

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Most Expensive Off Year Election in History (Real News Network)

Roosevelt Institute Senior Fellow Thomas Ferguson says that the huge sums spent on this election created races in which the Democrat sounded as corporate as the Republican.

What Democrats Get Wrong About Inequality (The Week)

Ryan Cooper cites Roosevelt Institute Fellow Mike Konczal's work on financialization to explain why economic inequality must be discussed as an issue of growth and fairness.

  • Roosevelt Take: Cooper links to Konczal's new article on this topic in Washington Monthly, as well as a piece by Roosevelt Institute Chief Economist Joseph Stiglitz.

The $9 Billion Witness: Meet JPMorgan Chase's Worst Nightmare (Rolling Stone)

Matt Taibbi reports on Alayne Fleischmann, the whistleblower who initiated one of the largest white-collar crime cases in American history, and how JPMorgan has tried to keep her story quiet.

A Bright Spot in Tuesday’s Bloodbath: Massachusetts Voters Passed a Strong Paid Sick Leave Bill (In These Times)

Massachusetts's new paid sick leave program is the most comprehensive and ambitious in the nation, writes Michael Arria, with full-time workers earning 40 hours of paid sick leave per year.

My Fearless Predictions for the Next 18 Months (MoJo)

Kevin Drum predicts that very little will actually happen in Congress following this election, limiting possible accomplishments to trade agreements and tweaks to Obamacare.

It’s Opposite Day for the Hawks and Doves at the Federal Reserve (WaPo)

Ylan Q. Mui explains that the hawks are now asking whether unemployment will fall too low, while the doves worry about whether inflation is rising according to plan.

New on Next New Deal

With This Political Scene, Millennial Turnout Isn't a Surprise

Roosevelt Institute Associate Director of Networked Initiatives Alan Smith argues that low Millennial turnout should be blamed on the dysfunctional system – and suggests some improvements.

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Daily Digest - November 6: Electoral Cycles Aren't Enough for Voter Engagement

Nov 6, 2014Rachel Goldfarb

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Understanding the Electorate (All In with Chris Hayes)

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Understanding the Electorate (All In with Chris Hayes)

Roosevelt Institute Fellow Dorian Warren says that political parties need to figure out a way to engage voters outside of the electoral cycle if they're going to increase turnout in the midterms.

Private Equity’s Sunshine Problem (PE Hub)

Chris Witkowsky builds on Roosevelt Institute Fellow Saqib Bhatti's recent letter to the editor in The New York Times, creating a proposal for some private equity fund terms to be made public.

A Big Night For Minimum Wage Increases (FiveThirtyEight)

Ben Casselman says that voters' approval of minimum wage increases and Republicans winning statewide office may seem at odds, but these votes stem from the same economic fears.

Three States Could Have Ended Legal Abortion. Only One Did. (MoJo)

Erika Eichelberger reports on the failed personhood measures in Colorado and North Dakota, as well as Tennessee's successful one, which is expected to lead to extreme anti-choice laws.

Voters in Seattle Just Taxed Themselves to Pay for Preschool for the Poor (WaPo)

Emily Badger looks at one local progressive win from Tuesday's elections. The Seattle proposition will fully subsidize preschool for families earning up to 300 percent of the poverty level.

New on Next New Deal

In Blowout Aftermath, Remember GDP Growth Was Slower in 2013 Than in 2012

Roosevelt Institute Fellow Mike Konczal reminds us that the Great Recession isn't actually over. The data explains why voters, still worried about the economy, are expressing such discontent.

Leadership Wanted: Pushing for More College Attainment? Start in Public Housing.

Roosevelt Institute | Campus Network Leadership Director Kevin Stump argues that public housing creates an opportunity to bring together resources to help needy students where they live.

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Rortybomb on the March: Special Washington Monthly Inequality Issue and The Nation

Nov 4, 2014Mike Konczal

Hey everyone, I have two new pieces out there I hope you check out.

The first is a piece about the financialization of the economy in the latest Washington Monthly. I'm heading up a new project at Roosevelt, more details to come soon, about the financialization of the economy, and this essay is the first product. And I'm happy to have it as part of a special issue on inequality and the economy headed up by the fine people at the Washington Center for Equitable Growth. There's a ton of great stuff in there, including an intro by Heather Boushey, Ann O'Leary on early childhood programs, Alan Blinder on boosting wages, and a conclusion by Joe Stiglitz. It's all really great stuff, and I hope it shows a deeper and wider understanding of an inequality agenda.

The second is the latest The Score column at The Nation, which is a focus on the effect of high tax rates on inequality and structuring markets. It's a writeup of the excellent Saez, Piketty, and Stantcheva Three Elasticies paper, and a continuation of a post here at this blog.

Follow or contact the Rortybomb blog:
 
  

 

Hey everyone, I have two new pieces out there I hope you check out.

The first is a piece about the financialization of the economy in the latest Washington Monthly. I'm heading up a new project at Roosevelt, more details to come soon, about the financialization of the economy, and this essay is the first product. And I'm happy to have it as part of a special issue on inequality and the economy headed up by the fine people at the Washington Center for Equitable Growth. There's a ton of great stuff in there, including an intro by Heather Boushey, Ann O'Leary on early childhood programs, Alan Blinder on boosting wages, and a conclusion by Joe Stiglitz. It's all really great stuff, and I hope it shows a deeper and wider understanding of an inequality agenda.

The second is the latest The Score column at The Nation, which is a focus on the effect of high tax rates on inequality and structuring markets. It's a writeup of the excellent Saez, Piketty, and Stantcheva Three Elasticies paper, and a continuation of a post here at this blog.

Follow or contact the Rortybomb blog:
 
  

 

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Daily Digest - November 4: How the Growth of Finance Shrank the American Dream

Nov 4, 2014Rachel Goldfarb

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Frenzied Financialization (Washington Monthly)

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Frenzied Financialization (Washington Monthly)

Roosevelt Institute Fellow Mike Konczal introduces the concept of financialization as a source of inequality, and lays out steps to reduce the financial sector's size and power.

Slow Growth and Inequality Are Political Choices. We Can Choose Otherwise. (Washington Monthly)

In the concluding article for Washington Monthly's special issue on inequality, Roosevelt Institute Chief Economist Joseph Stiglitz presents a policy path to reduce inequality.

  • Roosevelt Take: In his article, Stiglitz references his 2014 white paper, "Reforming Taxation to Promote Growth and Equity," available here.

Why the GOP Won't Touch Obamacare (Politico)

Roosevelt Institute Senior Fellow Richard Kirsch says that it's too late for anything but minor changes to the Affordable Care Act, because people like having health insurance.

The Midterm Minimum-Wage Mandate (WaPo)

Minimum wage ballot measures will be progressives' big win today, predicts Katrina vanden Heuvel, a member of the Roosevelt Institute's Board of Directors. The direct impact on workers matters.

Obamacare Could Have Turned Millions of Uninsured Americans Into Voters (MoJo)

Erika Eichelberger points out that the navigators who help people sign up for insurance on the ACA's exchanges could have been required to train to register voters as well.

New on Next New Deal

Election 2014: Women's Rights in the Balance

Roosevelt Institute Fellow Andrea Flynn's series on the close-call races that will impact women's health and economic security concludes with the Kansas Senate and gubernatorial races.

Guest Post: A Review of Fragile By Design

David Fiderer argues that the book distorts the realities of the financial crisis in a manner that could be dangerous, should it become conservative's central text on the topic.

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