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Matt Taibbi’s Case Against Hillary Clinton Is Surprisingly Weak

by EliseNivison076 Posted on March 26, 2016

Mother Jones

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Long post ahead. Sorry.

I think I’ve made it clear that I generally support Hillary Clinton over Bernie Sanders in the Democratic race. I don’t make a big deal out of this because I like Bernie too. My preference for Hillary is clear but fairly modest. Without diving into a long and turgid essay about this, here are few quick bullet points explaining why I like Hillary:

Her entire career has demonstrated a truly admirable dedication to helping the least fortunate.
Unlike her husband, she obviously doesn’t enjoy the cut and thrust of partisan campaigning. Yet she soldiers on after taking decades of sewage-level abuse that would overwhelm a lesser person. This demonstrates the kind of persistence that any Democrat will need governing with a Republican Congress.
She takes policy seriously and she’s well briefed. She doesn’t pretend that one or two big ideas can suddenly create a revolution.
She’s a woman, and yes, I’d like to see a woman as president.
Special pleading to the contrary, a moderate candidate is almost certain to be more electable in November than a self-declared democratic socialist.
In the Senate she demonstrated that she could work with Republicans. Yes, it was always on small things, the GOP being what it is these days. Still, she built a reputation for pragmatic dealmaking and for her word always being good.

Needless to say, Hillary also has weak points. She has decades in the public eye, and voters usually prefer candidates with more like 10-15 years of national exposure. What’s more, she obviously comes with a lot of baggage from those decades. On a policy level, I don’t get the sense that her foreign policy instincts have changed much based on events since 9/11, and that’s by far my biggest complaint about her. Finally, I’m not thrilled with political dynasties.

OK. That’s the throat clearing. The real point of this post is Matt Taibbi’s article explaining why he disagrees with Rolling Stone’s endorsement of Hillary. It’s hardly surprising that Taibbi is a Bernie fan, but I was little taken aback by the thinness of his argument. Here’s the nut of it:

The implication of the endorsement is that even when young people believe in the right things, they often don’t realize what it takes to get things done. But I think they do understand….The millions of young voters that are rejecting Hillary’s campaign this year are making a carefully reasoned, even reluctant calculation about the limits of the insider politics both she and her husband have represented.

For young voters, the foundational issues of our age have been the Iraq invasion, the financial crisis, free trade, mass incarceration, domestic surveillance, police brutality, debt and income inequality, among others. And to one degree or another, the modern Democratic Party, often including Hillary Clinton personally, has been on the wrong side of virtually all of these issues.

Let’s go through those one by one.

The Iraq invasion: This one is totally fair. Hillary did support the invasion, and it was the wrong call. What’s more, this is a good proxy for her general hawkishness, which is her weakest point among millennials and her weakest point among an awful lot of older voters too.

The financial crisis: Taibbi doesn’t even bother making an argument for this aside from some snark about the speeches Hillary gave to Goldman Sachs. But that’s just petty point scoring. Beyond that, it’s plainly unfair to blame her by association for legislation signed by Bill, which she had no hand in. And look: the only Clinton-era law that probably had a significant effect on the financial crisis was the Commodity Futures Modernization Act, which was supported by 83 percent of the House and 100 percent of the Senate. Even Bernie voted for it. The truth is that Hillary’s positions on Wall Street reform are reasonably solid.

Free trade: This is a “foundational issue” for millennials? Starting in the late 90s, there was a 3-4 year period of anti-globalization protests, and that was about it for high-profile attention. Most millennnials were barely in their teens at that point. A recent Gallup poll asked Americans if increased trade was good or bad, and 35 percent said it was bad. Among millennials, it was 32 percent, lower than most other age groups. Trade is getting a lot of attention lately thanks to TPP and Donald Trump, but it’s just never been a foundational issue for millennials.

Mass incarceration: This again? Taibbi says that Bill Clinton “authorized more than $16 billion for new prisons,” and slams Hillary because she “stumped for that crime bill, adding the Reaganesque observation that inner-city criminals were ‘super-predators’ who needed to be ‘brought to heel.'” The truth: Bill Clinton had barely any effect on incarceration; Hillary’s “super-predator” remark was reasonable in context; and both Clintons have long since said they regretted the carceral effects of the 1994 crime bill—which, by the way, Bernie Sanders voted for. Give it a rest.

Domestic surveillance: Taibbi doesn’t actually say anything further about this, but I’ll grant that I prefer Bernie’s instincts on this issue, just as I prefer his instincts on most national security issues. But anyone who thinks Bernie could make a dent in this is dreaming. In concrete terms, mass surveillance enjoys substantial public support and virtually unanimous support among elites and lawmakers—and that’s after the Snowden revelations, which were basically the Abu Ghraib of mass surveillance. It’s really not clear that in practice, Bernie would do much more about this than Hillary.

Police brutality: Bernie barely even mentioned this until he was the target of protests from Black Lives Matter a few months ago. It’s hardly one of his go-to subjects, and there’s no real reason to think Hillary’s position is any less progressive than his. In any case, this is almost purely a state and local issue. As president, neither Hillary nor Bernie would be able to do much about it.

Debt and income inequality: Once again, Taibbi doesn’t bother to say much about this. Here’s his only actual argument: “Hillary infamously voted for regressive bankruptcy reform just a few years after privately meeting with Elizabeth Warren and agreeing that such industry-driven efforts to choke off debt relief needed to be stopped.” But this is just plain false. And while there’s no question that Bernie is stronger than Hillary on Wall Street issues, both rhetorically and in practice, Hillary has generally been pretty strong on all these issues too. And her proposals are generally a lot more serious and a lot more practical than Bernie’s.

Put this all together and here’s what you get. Hillary’s instincts on national security are troublesome. If that’s a prime issue for you, then you should vote against her. It’s certainly the issue that gives me the most pause—though I have some doubts about Bernie too, which I mention below.

She also lags Bernie in her dedication to bringing Wall Street to heel. But this is a much trickier subject. Bernie has thunderous rhetoric, but not much in the way of plausible plans to accomplish anything he talks about. Frankly, my guess is that neither one will accomplish much, but that Hillary is actually likely to accomplish a little more.

In other words, there’s just not much here aside from dislike of Hillary’s foreign policy views. That’s a completely legit reason to vote against her, but it’s hard to say that Taibbi makes much of a case beyond that.

Bernie Sanders too often lets rhetoric take the place of any actual plausible policy proposal. He suggested that his health care plan would save more in prescription drug costs than the entire country spends in the first place. This is the sign of a white paper hastily drafted to demonstrate seriousness, not something that’s been carefully thought through. He bangs away on campaign finance reform, but there’s virtually no chance of making progress on this. The Supreme Court has seen to that, and even if Citizens United were overturned, previous jurisprudence has placed severe limits on regulating campaign speech. Besides, the public doesn’t support serious campaign finance reform and never has. And even on foreign policy, it’s only his instincts that are good. He’s shown no sign of thinking hard about national security issues, and that’s scarier than most of his supporters acknowledge. Tyros in the Oval Office are famously susceptible to pressure from the national security establishment, and Bernie would probably be no exception. There’s a chance—small but not trivial—that he’d get rolled into following a more hawkish national security policy than Hillary.

I’m old, and I’m a neoliberal sellout. Not as much of one as I used to be, but still. So it’s no surprise that I’m on the opposite side from Taibbi. That said, I continue to be surprised by the just plain falseness of many of the left-wing attacks on Hillary, along with the starry-eyed willingness to accept practically everything Bernie says without even a hint of healthy skepticism. Hell, if you’re disappointed by Obama, who’s accomplished more than any Democratic president in decades, just wait until Bernie wins. By the end of four years, you’ll be practically suicidal.

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Matt Taibbi’s Case Against Hillary Clinton Is Surprisingly Weak

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Do We Panic Too Much? (Spoiler: Yes We Do)

by BrockBroadbent9 Posted on March 24, 2016

Mother Jones

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I’m not sure what brought this on—oh, who am I kidding? I know exactly what brought this on. Anyway, I was thinking about recent public panics and started listing a few of them in my mind. This is just off the top of my head:

Crack babies
Super predators
Lehmann/AIG/Countrywide etc.
Mad cow
Deepstar Horizon
Daycare child molesters
Ebola
ISIS/Syrian refugees

I’m not saying that none of these were justified. Big oil spills are no joke. Ebola was certainly a big deal in Africa. The financial collapse of 2008 wasn’t mere panic.

And yet, generally speaking it seems as if public panics are either completely unjustified or else wildly overwrought. Am I missing any recent examples where there was a huge panic and it turned out to be wholly justified? HIV would have been justified in the early 80s, but of course we famously didn’t panic over that—other than to worry about getting AIDS from toilet seats. Help me out here, hive mind.

POSTSCRIPT: I should mention that despite my choice of illustration, I’ve never really blamed anyone for the tulip panic. Personally, I think tulips are worth going crazy over.

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Do We Panic Too Much? (Spoiler: Yes We Do)

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Almonds Are Getting Cheaper, But Here’s the Catch

by SalvadoJ36 Posted on January 27, 2016

Mother Jones

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Ye almond-loving hipsters, rejoice! The revered—and lately quite expensive—nut is likely to get cheaper soon. The wholesale price for almonds—the one paid by supermarkets to stock their bulk bins, or by processors to make their trail mixes—has fallen from a high of $4.70 last August down to $2.60, reports the Financial Times.

And the reason has nothing to do with a viral screed against almond milk penned by a certain wag in 2014. Rather, it’s the same set of forces that triggered California’s massive almond boom in the first place: the vagaries of global demand.

The state’s growers, who churn out 99 percent of almonds grown in the United States, have rapidly expanded their almond groves over the past decade and a half.

But that expansion didn’t happen just to satisfy your trendy almond-milk latte habit. California farmers are almond growers to the world: They supply about 80 percent of the almonds consumed globally, and export demand has risen steadily for most of the past 15 years. About 70 percent of California’s almonds are exported. According to the Almond Board of California, the great bulk of this massive outflow goes to Asia, the destination of 44 percent of California’s almond exports, and Western Europe, which gets about 40 percent.

As a result of that booming global demand, the price farmers get for almonds has risen dramatically despite the big acreage expansion.

But in recent months, the global appetite for almonds has plunged. Here’s the Financial Times:

Last year’s surge in prices depressed demand, and buyers in China, the Middle East and India, who have led consumption over the past three to four years, have disappeared. Trading has ground to a halt as prices continue to decline and the number of rejected containers by buyers refusing to honor contracts has jumped.

“It’s a bloodbath,” one California-based nut trader told the Financial Times. What happened was that California’s multiyear drought took a bite out of crop yields, making almonds more scarce and pushing up their price. And then, in 2014, the US dollar began to rise in value against major Asian currencies and the euro, making US exports, including almonds, even more expensive in those regions.

To make matters worse, the European economy stagnated, and China—the globe’s biggest almond importer—saw its economic growth slow and its stock market tumble. Snack makers in Asia and Europe began to balk at pricey almonds, putting fewer in nut mixes and reducing the portion size of almond offerings, the FT reports. In 2015, almond exports to Asia and Western Europe fell 12 percent and 7 percent, respectively, according to the Almond Board of California.

And now, with a historic El Niño triggering a wet and snowy winter in California, the market expects a big harvest in 2016. Econ 101 tells us that abundant supply and weak demand means lower prices going forward. That likely means you’ll soon be getting at least a slight break on that bag of salty roasted almonds you keep at your desk. But what does it mean for California’s almond boom?

In previous posts, I’ve questioned whether the state has the water resources—or access to sufficient bee hives for pollination—to continue devoting ever more land to the crunchy treat. Unlike, say, vegetables or cotton, which can be fallowed during dry years, planting an almond grove requires farmers to commit to finding a steady water source for about 20 years, or risk losing a very expensive investment. (According to the Almond Board of California, establishing an almond grove—paying for land, saplings, an irrigation system, etc.—costs about $8,700 per acre, or about $2.6 million for a new 300-acre grove.)

During the drought, water from California’s massive irrigation projects, which deliver melted Sierra Nevada snow to the state’s farms, was largely cut off. Farmers responded by fallowing a portion of annual crops like cotton and vegetables and irrigating the rest—including their ever-expanding almond groves—with water drawn from finite underground aquifers. While the current El Niño might spell the end of a drought that has haunted California since 2012, California agriculture has gotten so ravenous for water that aquifers in its largest (and most almond-centered) growing region, the Central Valley, have been declining steadily for decades.

For my deep dive into the almond boom last year, I asked David Doll, an orchard adviser with the University of California Cooperative Extension, how long growers could keep devoting ever more land to almonds despite the long-term water crunch. He told me it would only stop “when the crop stops making money.”

I checked back in with him to see what he thought about the current price drop. He said under normal conditions, when water is flowing from the state’s irrigation projects, the break-even farmer price for almonds is about $1.45 per pound—at that price, farmers neither lose nor make money. But when water is scarce, farmers face higher irrigation costs, and the break-even price rises to somewhere between $2.60 and $2.85—roughly where prices are now. So even with the current price drop, most almond growers are breaking even. But if we get another wet winter this year, water prices could drop by 2017 and almond farmers will be right back to profitability.

If the Asian and European appetite for almonds returns to normal growth rates, Doll added, the almond expansion will likely continue unabated, which will in turn limit large upward price swings as supply rises to meet demand. The limiting factor, of course, is water. Back in 2014, California shook off a history of Wild West aquifer stewardship and passed the Sustainable Groundwater Management Act, which requires that by 2025, the state’s aquifers can’t be drawn down faster than they’re recharged—a dramatic reversal of the status quo. “From my observations, there are many almond operations that are not planning for this policy,” Doll said, meaning they’re not prepared for a future when aquifers can’t be tapped at will.

But 2025 is nearly a decade away. Enjoy those relatively inexpensive almonds, you ignorant hipsters.

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Almonds Are Getting Cheaper, But Here’s the Catch

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Bernie Sanders Attacks Hillary Clinton’s Ties to Big Banks

by EarthaTWHH Posted on January 18, 2016

Mother Jones

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Bernie Sanders attacked Hillary Clinton’s ties to big banks, taking off the gloves on Sunday night in the last Democratic presidential debate before the Iowa caucuses.

Asked to lay out the difference between his and Clinton’s plans for dealing with big banks, Sanders responded with a personal jab.

“The first difference is, I don’t take money from big banks, I don’t get personal speaking fees from Goldman Sachs,” Sanders said, to boos and scattered applause from the audience.

Goldman Sachs paid Clinton $675,000 in speaking fees in 2015, according to public disclosures. Wall Street reform is a key plank in Sanders’ campaign platform.

“Can you really reform Wall Street when they are spending millions and millions of dollars on campaign contributions and when they are providing speaker fees to individuals?” Sanders asked. “So it’s easy to say, well, I’m going to do this and do that, but I have doubts when people receive huge amounts of money from Wall Street.”

Clinton responded by suggesting that Sanders had cast aspersions not only on her ties to financial corporations, but on President Barack Obama as well. “He’s criticized President Obama for taking donations from Wall Street, and President Obama has led our country out of the great recession…I’m going to defend President Obama for taking on Wall Street, taking on the financial industry and getting results,” Clinton said.

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Bernie Sanders Attacks Hillary Clinton’s Ties to Big Banks

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Newt Gingrich Says Elizabeth Warren’s Signature Program Is "Dictatorial." This Is What It Really Has Done.

by TyreeKruse Posted on December 28, 2015

Mother Jones

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“Today, the Consumer Financial Protection Bureau is so far outside the historic American model of constitutionally limited government and the rule of law that it is the perfect case study of the pathologies that infect our bureaucracies at the federal level,” former House Speaker Newt Gingrich solemnly intoned in his opening statement as an expert witness at a congressional hearing on December 16. “It is dictatorial. It is unaccountable. It is practically unrestrained in expanding on its already expansive mandate from Congress. And it is contemptuous of the rights, values, and preferences of ordinary Americans.”

Republicans and outside conservative groups spent much of 2015 attacking the Consumer Financial Protection Bureau (CFPB)—the federal financial regulator that opened in 2011, conceived and launched by Sen. Elizabeth Warren (D-Mass.) after it was included in the 2010 Dodd-Frank Wall Street reform law.

This month’s hearing, where conservatives on the House Financial Services Oversight and Investigations Subcommittee lambasted the CFPB for collecting data on credit card usage, was just the latest in a string of attacks against the consumer agency. Gingrich is a paid adviser to a corporate-funded group, the US Consumer Coalition, that doesn’t disclose the identities of its donors and was founded by a PR firm to attack the agency. In November, a conservative group ran an ad during Republican debates attacking the CFPB and Warren as Soviet operators trying to shut down regular borrowers. Republicans in Congress have consistently introduced bills that would hamper the CFPB’s ability to function by restricting its budget or weighing down its decision-making process with extra bureaucratic layers. Ted Cruz, the senator from Texas and Republican presidential candidate, has gone even further, introducing legislation to eradicate the agency.

But amid the attacks, it’s been easy to lose sight of what the CFPB has actually been up to. Earlier this month, the CFPB released a report examining how one part of its financial regulation has unfolded. The CARD Act, passed in 2010 and overseen by the CFPB, aimed to clean up the credit card industry by eliminating hidden fees that hurt consumers.

According to the CFPB, the CARD Act’s changes saved consumers from $16 billion in these sorts of hidden fees between 2011 and 2014. Most of those savings have been paid for with higher upfront interest rates. Still, the total cost of credit cards declined in the first few years after the law’s enactment and has held steady since then at about 2 percent less than before the CARD Act.

The banking industry has argued that further regulations along these lines would constrict the availability of credit, since companies might decide it is no longer worth offering cards when they won’t reap as much profit off their customers. But the CFPB found that, in fact, approval rates for credit cards are rising, with lines of credit growing as well.

The CFPB plays a broad watchdog role, keeping an eye on financial institutions to see if they’re ripping off consumers. When the for-profit school group Corinthian Colleges closed this year, the CFPB set up $480 million in loan forgiveness for indebted students. In March, the agency issued a set of proposed rules to place new checks on payday lending. (The rules have yet to be finalized.) The agency has also been looking to tackle subprime auto loans and the prevalence of arbitration clauses in contracts in order to make it easier for consumers to file class action lawsuits.

Are these actions against the “preferences of ordinary Americans,” as Gingrich said? It’s hard to say, since most people have little knowledge of the CFPB. When two liberal-leaning groups—Americans for Financial Reform and the Center for Responsible Lending—explained what the CFPB was up to while polling people, they found that 75 percent of respondents supported the agency. Even when the US Consumer Coalition, the industry group Gingrich advises, ran a poll on the CFPB, it found that people generally have a favorable view. Only 19 percent of respondents could identify the CFPB, but of those who were familiar with it, 31 percent had a favorable view, compared with 14 percent who viewed it negatively.

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Newt Gingrich Says Elizabeth Warren’s Signature Program Is "Dictatorial." This Is What It Really Has Done.

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How the Fed Raising Rates Will Affect You—And Everyone Else

by LoisCropper Posted on December 16, 2015

Mother Jones

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The Federal Reserve on Wednesday raised its benchmark interest rate for the first time in nearly a decade. Citing rising employment and economic activity, the central bank’s Federal Open Market Committee voted to raise its target for the federal funds rate (the rate that banks pay to loan each other money overnight) to between 0.25 and 0.5 percent. Interest rates across the economy are expected to climb along with it.

This may not sound significant, but the Fed’s interest rate decisions have a huge impact on the American and global economies. The rate is one of the main mechanisms that the Federal Reserve uses to cool the economy and quell inflation. The last time the Fed raised it was in 2006. Then came the housing market crash, the Great Recession, and the Fed’s unprecedented response: nine years of near-zero rates aimed at spurring economic growth.

A growing contingent of influential economists believe that it is too soon to take moves that will slow economic growth, arguing that raising rates now will do the most damage to those who can least afford it: the poor and minorities. They say the Fed should only step in when there are clear signs of rising inflation, the traditional trigger for tightening monetary policy, which hasn’t happened yet.

The decade of near-zero interest rates have brought the economy into such unfamiliar territory, however, that other economists say we can’t predict the consequences of this move by the Fed. “The environment we’re in is just so out of the range of our models that we are a bit in the dark,” says Mark Calabria, director of financial regulation studies at the libertarian Cato Institute.

The one point everybody agrees on is that while the impact of this first hike may be minor, Yellen has indicated that more may follow and those will shift gears in the American economy. Everyone will be affected, with some clear winners and losers.

The big winners are likely to include:

The financial sector: Big banks and financial institutions have already seen a bump from the anticipated rate hike. Banks typically benefit from rising rates, because that means they are able to lend at higher long-term interest rates while borrowing at lower short-term ones. The financial sector also benefits from hard-on-inflation policies, since high inflation erodes the value of their investments. “Unexpected increases in inflation are wealth transfers from creditors to debtors,” explains Josh Bivens, research and policy director at the progressive Economic Policy Institute. “The finance sector really, really dislikes unexpected inflation.”

People with savings in the bank: Ralph Nader recently published a condescending letter that he wrote Yellen, urging her to raise rates for the sake of “the savers of America.” (Yellen responded with her own letter defending the Fed’s policies). Nader was onto something though: An extended period of low rates hits hardest ordinary people who keep their savings in bank accounts. With interest rates near zero, their savings stagnate. But there’s a twist. The very poor are generally unable to save much, which means that they don’t have much to lose. People with significant savings tend to put their money in the stock market, which has soared over the past few years.

“If you’re talking about people that have any significant savings at all—more than $5,000 or $10,000—they’re not keeping it in a checking account, they’re doing things like putting it in stock and bonds. And the price of stocks and bonds have actually been driven higher by the Fed’s policies,” says Bivens.

Small businesses (maybe): This seems counterintuitive. After all, “cheap money,” or low interest rates, are supposed to benefit borrowers. But since the financial crisis, big banks have all but cut off lending to small businesses. The lack of bank loans has pushed small business owners into the open arms of non-bank lenders, who charge far higher rates. (The Wall Street Journal cites a lender that charges 39 percent, as opposed to the 5 percent to 6 percent a bank would charge.) Some commentators have pointed out that higher rates could encourage banks to loosen their purse strings.

But at the same time, small businesses will be among the first to suffer if domestic demand drops—and some are worried that this could happen with higher interest rates. The Fed is betting that the economy is strong enough, but only time will tell.

The economy as a whole (maybe): The big question mark is whether so-called bubbles are already forming in some areas of the economy. There is no agreement on this point, but cheap debt historically encourages a rapid rise in prices in certain sectors followed by a sudden drop, which is what happened when the bubble “burst” in the housing market during the Great Recession. Some economists are worried that we could make the same mistake again. Calabria from the Cato Institute, explains that even though he has been arguing in favor of a rate hike for several years, he is concerned about this rate hike and the implications for “financial stability.” The discussions about it remind him of those from 2003 and 2004, before the last crisis. Some economists see a bubble growing in the housing market, while others, including former Fed Chairman Alan Greenspan, have sounded alarms about a potential bubble in the bond market.

The losers include:

Low-wage workers and the unemployed: Many pro-rate hike economists point to the unemployment rate as a reason to support the Fed’s move. The economy has been steadily adding jobs in recent months—including 211,000 in November—and unemployment, now at 5 percent, has returned to pre-recession levels. The point of low rates is to create jobs, so with unemployment down, some say the Fed has already done its job.

But although unemployment has dropped, underemployment—or the rate of people working in jobs that don’t match their skill level or working part time when they would prefer to work full time—is still high at 9.9 percent, according to Jared Bernstein, former chief economist to Vice President Joe Biden. What’s more, wages are rising well below target levels.

Some economists argue that it’s worth keeping rates low until their benefits spread to a greater number of low-income workers. “If this hike sets off a too-steep series of interest rate increases, I think the big losers are the literally couple of a million Americans who would not have jobs 12 to 18 months from now…and really tens of millions of Americans who will have slower wage growth over that time if we restrict economic growth too much,” says Bivens. Another argument for keeping rates low is that high employment disproportionately benefits black workers, who have been hit the hardest by the past two recessions.

Emerging markets: Developing economies such as Russia, Turkey, and Brazil may also take a hit from the rate hike. By attracting investors to the United States with higher returns, the Fed’s rate hike is expected to strengthen the dollar relative to other world currencies. For the many companies in emerging markets who have taken out dollar-denominated debt, this could be a major problem; they will have to pay more on their loans even as their own countries’ currencies remain weak. International investors are already expected to pull more than $500 billion out of emerging markets this year, making 2015 the first year in nearly three decades that more money has left emerging markets than entered them.

Exporters: The United States is tightening monetary policy just as the European Union, Japan and China move in the opposite direction, which will make the dollar even more attractive to foreign investors. A stronger dollar would push up the price of US exports, leaving some American companies at a competitive disadvantage.

Taxpayers: Finally, raising rates will push up one cost we all share—the cost of servicing government debt. Borrowing costs will rise along with interest rates, which will make it just that much harder for the government to close its deficit.

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How the Fed Raising Rates Will Affect You—And Everyone Else

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Like a Zombie, You Just Can’t Kill Countrywide Financial

by Dee24Gylizjqka Posted on November 30, 2015

Mother Jones

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Back at the height of the housing bubble, Countrywide Financial was responsible for about 15 percent of all the mortgage loans in America. This turned out to be disastrous because the people who ran Countrywide showed no interest at all in the quality of the loans they originated. Thanks to this, their business eventually imploded and in 2008 they were acquired by Bank of America.

But fear not. The executives behind Countrywide are still around, and they’re still shoveling out the loans:

PennyMac, AmeriHome Mortgage and Stearns Lending have several things in common.

All are among the nation’s largest mortgage lenders — and none of them is a bank. They’re part of a growing class of alternative lenders that now extend more than 4 in 10 home loans.

All are headquartered in Southern California, the epicenter of the last decade’s subprime lending industry. And all are run by former executives of Countrywide Financial, the once-giant mortgage lender that made tens of billions of dollars in risky loans that contributed to the 2008 financial crisis.

This time, the executives say, will be different.

You betcha! I’m sure these folks have all learned their lessons and will never push the mortgage envelope again. We can all breathe easy.

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Like a Zombie, You Just Can’t Kill Countrywide Financial

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This Was the Most Important Exchange of the Democratic Debate

by ImaCardoza Posted on November 15, 2015

Mother Jones

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Hillary Clinton and Bernie Sanders may have enjoyed a detente during the foreign policy portion of Saturday’s Democratic debate, but when the subject turned to Wall Street, the gloves came off.

It started when the CBS moderator, John Dickerson, asked Clinton how voters could trust her to rein in Wall Street given her close ties to the financial services industry. Clinton was ready for it. “Well I think it’s pretty clear that they know that I will,” she said. She described “two billionaire hedge fund managers who started a super-PAC and they’re advertising against me in Iowa.” Why? Because “they clearly think I’m going to do what I say I’m gonna do.” She then invoked her Senate career and pointed to legislation that she introduced to limit compensation and increase shareholder oversight and continued:

I’ve laid out a very aggressive plan to rein in Wall Street—not just the big banks, that’s a part of the problem, and I’m going after them, it’s a comprehensive plan. But I’m going further than that. We have to go after what’s call the shadow banking industry. Those hedge funds—look at what happened in ’08. AIG an insurance company. Lehmann Brothers, an investment bank, helped to bring our economy down. So I want to look at the whole problem, and that’s why my proposal is much more comprehensive than anything else that’s been put forth.

But when Dickerson asked Sanders for his response, the Vermont senator was unimpressed:

“Not good enough!”

“Here’s the story, I mean let’s not be naive about it,” he said. “Over her political career, why has Wall Street been a major, the major campaign contributor to Hillary Clinton? Now, maybe they’re dumb and they don’t know what they’re gonna get, but I don’t think so.”

Dickerson pressed Sanders on what specifically he believed Wall Street would get for the industry’s campaign contributions to his opponent. Sanders explained:

I have never heard a candidate—never—who’s received huge amounts of money from oil, from coal, from Wall Street from the military-industrial complex, not one candidate, who doesn’t say, ‘Oh, these contributions will not influence me, I’m going to be independent.’ But why do they make millions of dollars of campaign contributions? They expect to get something. Everybody knows that. Once again, I am running a campaign differently than any other candidate. We are relying on small campaign donors, 750,000 of them, thirty bucks apiece. That’s who am I indebted to.

Clinton was ready with a sharp response. “He has basically used his answer to impugn my integrity, let’s be frank here,” she began. “Not only do I have hundreds of thousands of donors—most of them small—and I’m proud that for the very first time, a majority of my donors are women—60 percent.” She said her support for Wall Street is because “I represented New York on 9/11 when we were attacked.”

Where were we attacked? We were attacked in downtown Manhattan where Wall Street is. I did spend a whole lot of time effort helping them rebuild. That was good for New York, it was good for the economy, and it was a way to rebuke the terrorists who had attacked our country. Now it’s fine for you to say what you’re gonna say but I looked very carefully at your proposal. Reinstating Glass–Steagall is a part of what very well could help. But it is nowhere near enough. My proposal is tougher, more effective, and more comprehensive because I go after all of Wall Street, not just the big banks.

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This Was the Most Important Exchange of the Democratic Debate

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Ted Cruz Really Hates Climate Change

by Laura Brown Posted on November 13, 2015

Mother Jones

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Yesterday I dinged Ted Cruz for blathering about how he’d eliminate five cabinet departments. Big deal. The programs would just go elsewhere. Instead, tell me what programs you’d eliminate.

As it turns out, Cruz does have a list of programs he wants to get rid of. It’s really hard to find because his website is a horrific mess, but here it is:

  1. Climate Ready Water Utilities Initiative
  2. Climate Research Funding for the Office of Research and Development
  3. Climate Resilience Evaluation Awareness Tool
  4. Global Methane Initiative
  5. Green Infrastructure Program
  6. Greenhouse Gas Reporting Program
  7. New Starts Transit Program
  8. Pacific Coastal Salmon Recovery Fund
  9. Regulation of CO2 Emissions from Power Plants and all Sources
  10. Regulation of Greenhouse Gas Emissions from Vehicles
  11. Renewable Fuel Standard Federal Mandates
  12. UN Intergovernmental Panel on Climate Change
  13. UN Population Fund (abortion)
  14. USDA Catfish Inspection Program (genuinely wasteful)
  15. Appalachian Regional Commission (helps poor people)
  16. Consumer Financial Protection Bureau (Obama program)
  17. Corporation for Public Broadcasting (culture war)
  18. Corporation for Travel Promotion (???)
  19. Legal Services Corporation (helps poor people)
  20. National Endowment for the Arts (culture war)
  21. National Endowment for the Humanities (culture war)
  22. Presidential Election Campaign Fund (no one uses it anymore)
  23. Saint Lawrence Seaway Development Corporation (???)
  24. Sugar Subsidies (anti-Rubio)
  25. Transportation Investment Generating Economic Recovery (part of hated Obama stimulus program)

I’ve re-ordered this list to make clear just how much Cruz hates climate change. Nearly half of his cuts are to programs related to the environment or climate change. Cruz also wants to ditch some culture warrior stuff (arts, humanities, public broadcasting), some anti-liberal stuff (legal services, CFPB, TIGER), some anti-Rubio stuff (sugar subsidies), and some genuinely stupid stuff (USDA catfish inspection, a clever protectionist measure beloved of catfish-producing states).

So how much would this save? Cruz says $50 billion per year, but that seems pretty optimistic. The catfish thing, for example, costs $14 million, and lots of items on the list don’t cost the government anything. I suppose I could google all 25 of them and see what they add up to, but not today. My horseback guess, though, is maybe $10-20 billion.

I’ve tried to identify the reasons Cruz hates each of these programs, but I came up blank on two of them: travel promotion and the Saint Lawrence Seaway. Maybe they’re genuinely wasteful. I’m not sure.

In any case, this is it. Cruz deserves credit for at least making a list, which is more than most candidates are willing to do. But will this actually save more than a tiny fraction of his stupendous tax cuts? Not a chance.

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Ted Cruz Really Hates Climate Change

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Women Can Boost Their Testosterone Just by Acting Like a Boss

by LurleneHollins Posted on October 26, 2015

Mother Jones

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We often point to testosterone to explain the traits that make men “manly”: competitiveness, horniness, impulsiveness. People have even blamed the testosterone levels of the architects of the Great Recession for the devastatingly awful decisions that led to the financial crash.

But new research shows that the reason men have more testosterone than women may have as much to do with gender socialization as inherent biology. Scientists from the University of Michigan published a study today that found that the act of wielding power increases testosterone levels regardless of gender. The study’s authors went on to hypothesize that the reason women generally have less of the hormone than men may be, at least in part, because of gender norms that prevent women from accessing positions of power and discourage them from being competitive.

To come to this conclusion, researchers hired more than 100 actors to perform an activity during which they held power over someone else: firing a subordinate employee. The actors performed the firing both acting with stereotypically “masculine” traits (using dominant poses, taking up space, not smiling), and with stereotypically “feminine” traits (lifting their voice at the end of sentences, being hesitant, not making eye contact). Researchers also measured the levels of a control group watching a travel documentary.

What they found was fascinating.

Not only did the female subjects acting in a stereotypically masculine way see an increase in testosterone (compared with the control), but those performing in a “feminine” way saw a significant boost, as well. In other words, just the act of wielding power, regardless of whether the wielder is performing maleness, increases testosterone levels. The study found that men did not have much of a testosterone boost during the activity, which, the study’s authors guessed, could be because men’s more frequent engagement in competitions and power-wielding activities “might paradoxically lead to dampened testosterone responses.”

“Our results would support a pathway from gender to testosterone that is mediated by men engaging more frequently than women in behaviors such as wielding power that increase testosterone,” the study says.

What’s that in layman’s terms? Gender inequality, at least in part, may be part of what’s making men manly.

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Women Can Boost Their Testosterone Just by Acting Like a Boss

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