Author Archives: BennettR89

Flint Officials Were Just Charged With Multiple Felonies in the City’s Water Crisis

by BennettR89 Posted on December 20, 2016

Mother Jones

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On Tuesday, Michigan Attorney General Bill Schuette charged two former emergency managers with multiple felonies in an ongoing investigation of the dangerous levels of lead that turned up in Flint’s drinking water. Darnell Earley and Gerald Ambrose, who were tasked with overseeing the beleaguered city’s finances between 2013 and 2015, were accused of false pretenses, conspiracy to commit false pretenses, misconduct in office, and willful neglect. Schuette also charged two former Flint officials, Howard Croft and Daugherty Johnson, with false pretenses and conspiracy to commit false pretenses. If found guilty, Earley and Ambrose would face up to 46 years in prison; Croft and Johnson would face 40 years.

Schuette opened the investigation in January this year; to date, 13 former city and state officials have been charged.

“All too prevalent in this Flint Water Investigation was a priority on balance sheets and finances rather than health and safety of the citizens of Flint,” said Schuette in a statement.

The charges call into question the efficacy of the emergency manager role, which enables the governor to appoint a representative to help balance a budget of economically failing cities. Other states have similar roles, but Michigan’s is the most expansive: Emergency managers have the power to cancel city contracts, unilaterally draft policy, privatize public services, fire elected officials, and more. Flint was one of the first cities in Michigan to be assigned an emergency manager, in 2011.

In 2014, under the management of Earley, the city switched water sources to the Flint River—a cost-saving measure that would prove to be disastrous. (Earley would go on to become the emergency manager of Detroit Public Schools before stepping down in February this year.) In March 2015, as residents were reporting foul-smelling, tainted water coming from the taps, the Flint City Council voted to “do all things necessary” to switch back to Detroit’s water system—its former water source. Then-acting emergency manager Ambrose nixed the vote, calling it “incomprehensible.” By the end of the year, Flint Mayor Karen Weaver had declared a state of emergency because of children’s soaring blood lead levels.

Tuesday’s charges come just days after congressional Republicans quietly closed a yearlong investigation into the crisis, and two weeks after Congress cleared $170 million to address the Flint water crisis and help other areas with lead-tainted water. A recent Reuters investigation found nearly 3,000 areas with blood lead poisoning rates at least double those in Flint at the peak of the crisis.

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Flint Officials Were Just Charged With Multiple Felonies in the City’s Water Crisis

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Ted Cruz Explains the Great Recession

by BennettR89 Posted on December 4, 2015

Mother Jones

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Jim Pethokoukis draws my attention to Ted Cruz’s theory of why the Great Recession was so great. Here is Joseph Lawler describing Cruz’s questioning of Fed chairman Janet Yellen yesterday:

Cruz began a round of questioning by stating that, in the summer of 2008, “the Federal Reserve told markets that it was shifting to a tighter monetary policy. This, in turn, set off a scramble for cash, which caused the dollar to soar, asset prices to collapse and the consumer price index to fall below zero, which set the stage for the financial crisis.”

….Yellen, although used to obscure or hostile questions from members of Congress, seemed taken off-guard. “I think the Fed responded pretty promptly in easing monetary policy to the pressures that were emerging,” she responded, saying that she wouldn’t blame the financial crisis on the Fed failing to lower rates during the meeting. She also noted that the Fed had lowered its target rate to zero by December.

I think you can argue that the Fed should have responded sooner and more forcefully to the events of 2008, but the problem with Cruz’s theory is that it just doesn’t make sense. Take a look at the chart on the right, which shows the Fed Funds target rate during the period in question. In April 2008, the Fed lowered its target rate to 2 percent. Then it waited until October to lower it again.

So the idea here is that if the Fed had acted, say, three months earlier, that would have saved the world. This ascribes super powers to Fed open market policy that I don’t think even Scott Sumner would buy. Monetary policy should certainly have been looser in 2008, but holding US rates steady for a few months too long just isn’t enough to turn an ordinary recession into the biggest global financial meltdown in nearly a century.

Cruz would like to blame the Fed, but they bear only a modest responsibility. Better culprits include underregulation of shadow banking; a housing bubble fueled partly by fraud and partly by Wall Street irresponsibility; excess systemic leverage; and Republican unwillingness to fight the recession with fiscal policy. Unfortunately, none of those fit Cruz’s agenda. So the Fed it is.

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Ted Cruz Explains the Great Recession

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