Former TARP Inspector Thinks Crash is Inevitable

Cenk Uygur interviews Neil Barofsky, former Treasury Department Inspect General who oversaw the TARP program.

 

A Congratulatory Note to Our New Grads (With a Caveat)

By Robert Valencia

My niece—who is pursuing a degree in psychology—asked me a week ago to review her essay on the American Dream for one of her English courses. Her essay began explaining what the “American Dream” ought to be: economic mobility, home ownership, and better education. But the remaining two pages offered a gloomy viewpoint: the American Dream has become more and more elusive for her.

Though she’s two years shy from obtaining her bachelor’s degree, her disappointment in finding a job (or in her case, a paid internship) very much reflects not only what our latest Public Opinion Monthly found with regard to the mounting pessimism surrounding the “Dream” premise, but also the economic outlook many of the brand-new college graduates face today. According to a recent article from The New York Times, employment rates for new college graduates have fallen sharply in the last two years in tandem with their starting salary: $27,000, down from $30,000 for those who joined the workforce in 2006 to 2008.

Some of the lucky members of the Class of 2010—56 percent—have held at least one job during the spring semester. However, some the jobs these graduates attain do not necessarily require the skills they learned in college; we hear stories from chemistry majors working in retail stores or Latin American studies graduates tending bar or waiting tables. What’s more, many of these students are having trouble paying student loans, which have reached a median of $20,000 for graduates in the classes of 2006 and 2010.

To make matters worse, some researchers point out that many of our new graduates are not being taught the necessary critical thinking and writing skills during their undergraduate years. NYU Professor Richard Arum co-authored the book Academically Adrift: Limited Learning on College Campuses, a study that shows a large number of students who showed no progress on initial tests of critical thinking, complex reasoning, and writing. The book went on to say that many of them had minimal exposure to rigorous coursework, and that the average student only spent 12 to 13 hours per week studying. The authors believe that academic investments have become a lower priority, as many schools prefer to invest in “student centers, deluxe dormitory rooms, and expensive gyms.”

As we approach a new electoral cycle, it is imperative to remind our elected officials that expanding economic and educational opportunities for all must be paramount in their political agenda. Despite such a bleak outlook, our recent graduates deserve a fair chance to achieve their full potential, and where they start out in their lives should not predetermine where they end up. Our country should adopt programs like student loan counseling (for recent grads) and worker retraining (for the more experienced workforce) that will in turn strengthen our economy.

All in all, we salute all the new graduates in the prime of their professional lives—an effort that in the end will pay off financially and intellectually, even though unemployment and other negative factors stand in their way for now. And here is perhaps a note of relief: We’re all in this together, and it’s our responsibility as a society to create and hold on to basic tools and resources to provide security for ourselves and our families. To read more about The Opportunity Agenda’s work on economic recovery and opportunity, click here.

Weekly Diaspora: One Year After SB 1070, What’s Changed?

by Catherine A. Traywick, Medica Consortium blogger

A year ago this month, Arizona Governor Jan Brewer signed SB 1070 into law, effectively pushing an already vibrant anti-immigrant movement to a new extreme. Over the following months, immigrant rights advocates prepared for the worst, and grappled with multiple setbacks as other states threatened to follow Arizona’s example.

Looking back, though, it’s clear that the draconian immigration law hasn’t quite measured up to its bad reputation—in part because a federal injunction blocked several of its more pernicious provisions.Kent Peterson at New America Media/Frontera NorteSur suggests that anti-immigrant policymakers “overreached” with SB 1070, pushing the restrictionist movement to its own peak with the controversial law.

Arizona’s political influence has waned

Certainly in the long term, the law seems to have done more harm than good to the movement. While it initially added plenty of fuel to the restrictionists’ fire, it has ultimately failed to spread through other states the way many expected it to. While a few states (seeColorlines.com’s infographic or Alternet’s rundown) are still considering SB1070-type laws, most others have backed off the idea.

As Seth Hoy explains at Alternet/Immigration Impact, “states learned from Arizona — the numerous protests, Supreme Court challenge, costly litigation, economic boycotts that are still costing state businesses millions — and rejected similar laws.” Peterson similarly notes that a number of states have moved away from Arizona’s example because of SB 1070’s unexpected economic consequences—chiefly, an estimated $769 million in economic and tax revenues lost as a result of boycotts.

Immigrants still marginalized

That’s not say that the law has had no effect on immigrants. While a federal judge stayed several of its provisions last summer, SB 1070 proved to be a precursor to other insidious state laws targeting immigrants. Empowered by their success with SB 1070 and the ensuing media frenzy, state legislators quickly moved forward with several other harsh laws. As Feet in Two Worlds’ Valeria Fernandez explains, many immigrants in Arizona continue to live in fear even though SB 1070 is only partially enacted. She writes:

When you talk to immigrants in the street, they’ll tell you that not much has changed. Some continue to live in fear that they could be stopped by the police and deported. Others are having a difficult time getting work due to another Arizona law that harshly sanctions employers who hire undocumented immigrants.

At Colorlines.com, Seth Freed Wessler elaborates on the real impact of bills like SB 1070. He writes:

[The bills] send waves of fear and confusion into immigrant communities. … In the period since SB 1070 passed, uncounted numbers of immigrants have fled their homes in Arizona. … And the provisions in the law that were not blocked by the court, including one that makes it a crime to harbor or transport undocumented immigrants, put everyone at risk.

The role of the federal government

Nevertheless, Wessler points out that the federal government—not SB 1070 and not Arizona—is to blame for the brunt of the damage inflicted upon undocumented immigrants in the last year. Besides deporting record numbers of immigrant detainees and significantly expanding border enforcement, the Department of Homeland Security laid the groundwork for SB 1070 with its 287(g) program—which enabled local law enforcement to act as ICE agents. Adding insult to injury, President Barack Obama never came to close to fulfilling his campaign promise of passing comprehensive immigration reform.

Whether he will do so this year is up for debate, but many reform advocates remain skeptical after last year’s ups and downs. As Marcos Restrepo of the American Independent reports, several immigrant rights activists voiced disappointment after Obama convened a White House meeting on immigration last Tuesday. Chief among the critics was Pablo Alvorado, director of the National Day Laborer Organizing Network, who said in a statement:

While we appreciate the President’s effort to keep immigration reform on the national agenda, his actions belie his intent…If the President genuinely wanted to fix the broken immigration system, he would respond to the growing chorus of voices calling for the suspension of the secure communities program and move to legalize instead of further criminalize our immigrant communities.

The American Prospect’s Gabriel Arana is similarly skeptical of both the president’s approach to the problem, and his ability to enact meaningful reform:

On one hand, it is laudable that the president has revived the immigration debate, but there is a reason it died last year, even with Democrats in firm control of Congress and the executive branch. Instead of trying to tack immigration reform to an enforcement bill, the president should change the frame and stop talking about immigration as a national-security issue rather than an issue in its own right.

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

 

 

Weekly Audit: Hostage-Taking Over the Debt Ceiling

 

By 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 bymembers 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 MulchThe Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

 

Weekly Mulch: Cost-Cutting at the Environment's Peril

 

by Sarah Laskow, Media Consortium blogger

In Washington, the environment is under attack. The cost-cutting deal that the House passed yesterday stripped the Environmental Protection Agency of $1.6 billion, which made up 16% of the agency’s budget. Funds for clean energy were cut. Republicans put in a provision that would keep the Department of the Interior from putting aside public lands for conservation and one thatkilled the nascent climate center at the National Oceanic and Atmospheric Administration.

These choices represent a deeper antipathy toward nature and environmental health than the run-of-the-mill climate denialism that’s become au courant among congressional Republicans. They show that plenty of leaders in Congress do not care about basic protections that ensure clean air and clean water or that keep even small stretches of the planet safe from mining, drilling and other human interventions.

Greenlining

One idea driving these decisions is that, economically, the country can’t afford to protect the environment right now. But as Monica Potts argues at The American Prospect, in a review of two new books that cover the economy and the environment, green policies are good for business. In reviewing Climate Capitalism by L. Hunter Lovins and Boyd Cohen, Potts notes that “$2.8 billion a year is wasted because employees don’t turn off their computers when they leave work; comprehensive clean-energy and climate legislation could create 1.9 million jobs; improving indoor air quality could save businesses $200 billion annually in energy costs.”

Almost 2 million jobs! The country could use that boost right now. But those jobs depend, of course, on government action. As Potts points out, businesses won’t necessarily adopt these solutions on their own. The other book she reviews, Seth Fletcher’s Bottled Lightning, explains why electric cars weren’t developed sooner.

In short, “oil has stayed so remarkably cheap,” Potts writes. And, as she says, “The market doesn’t capture all of the costs that fossil fuels and other industrial-era processes impose on society.” Environmentally friendly policies might be good for business, but sometimes business doesn’t know it. The private sector won’t learn that lesson, either, if Washington is willing to sacrifice its administrative infrastructure for handling environmental issues.

New energy, new decisions

The country’s going to want its government to have some environmental experts left around for another reason, too. As oil and gas get more expensive, alternative energy sources are going to look more appealing. But while they might have lower carbon emissions, they raise new issues about clean air and water and about their impact on ecosystems. The EPA, for example, is currently studying the water and air impacts of natural gas, which has been widely touted as a fuel source that emits less carbon than coal.

But that may not be accurate, either. In a study obtained this week by The Hill, Robert Howarth, a Cornell University scientist, found that the total amount of greenhouse gas emissions related to natural gas production may actually far outstrip the amount coal produces. Mother Jones’ Kate Sheppard explains:

While burning natural gas may emit less carbon dioxide, its extraction releases quite a bit of methane, a more potent greenhouse gas. Gas from shale—a fine-grained layer of rock below the earth’s surface—is also responsible for 30 percent more greenhouse gas emissions than conventional natural gas. The study found that up to 7.9 percent of the methane escapes directly from the wells, leaks from pipelines, or is released in venting and flaring. While the leaks may be relatively small, methane is such a potent greenhouse gas that those leaks have a major impact, Howarth tells Mother Jones.

Fighting back against fracking

If Howarth’s study is correct, that means even worse news for communities in the gas fields that have been fighting against new natural gas drilling, only to be told that it’s for the greater good. For instance, in New York this week, Public News Service’s Mike Clifford reports that “Dozens of environmental and health groups are asking [Gov. Andrew Cuomo and state lawmakers] to put the longer-term issues of air and water quality ahead of any short-term gas profits.”

The Sierra Club’s Roger Downs tells Clifford, “We’ve seen in places like Wyoming, where the oil and gas industry has been booming, children on certain days cannot go out and play; they get nosebleeds from the air quality. It’s serious stuff, and we don’t want that in New York.”

Just over in Pennsylvania, natural gas drilling has been going ahead, and Nina Berman reports for AlterNet on its impact on families:

The Spencers’ house, once valued at $150,000, is now worth $29,000. They have a methane monitor in their basement, a methane water filtration system in a backyard shed. They leave the door open when they take showers because with no bathroom windows they are afraid the house could blow up. Their neighbors were forced to evacuate once already because of high methane levels. In the middle of their yard, a shaft resembling a shrunken flagpole vents gas from their wellhead.

Right now, the EPA is studying the effects that natural gas drilling have on public health. Their findings could, at the very least, strengthen the case for putting restrictions on drilling companies to prevent pollution. But if anti-environmentalists in Washington keep cutting into the bottom line of environmental programs, families like the Spencers will have an even harder time fighting against the conditions they’re facing now.

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

 

Diaries

Advertise Blogads