Federal investigation

So let me get this straight. We see no criminal charges against the banking masterminds who crashed the economy, or the mortgage company crooks who are still stealing people’s houses with impunity, but this is at the top of the priority list?

Federal prosecutors in Brooklyn have opened a preliminary investigation into allegations that disgruntled sanitation workers sabotaged the cleanup after the blizzard last week that left some neighborhoods snowbound for days, people who have been briefed on the inquiry said Tuesday.

The investigation is focusing on whether there was a work slowdown and, if so, whether it was an effort to pad overtime. If the actions took place, two of those people said, they could constitute wire fraud or wire fraud conspiracy, both federal crimes. Both people spoke on the condition of anonymity because the investigation was continuing.

The inquiry, which began last week, is being conducted by the Public Integrity Section in the office of United States Attorney Loretta E. Lynch, which will work with the city’s Department of Investigation, one of the people said. The city investigators also began looking into possible efforts to sabotage the cleanup last week.

“We’re taking a look at this,” one of the people said, adding that the inquiry was in its earliest stages. It was reported Monday night by WCBS-TV News.

City officials have said that the cleanup’s primary obstacle was the large number of vehicles stuck in the middle of streets, which left many impassable to snow plows.

Critics have said that the Bloomberg administration’s choice not to declare a snow emergency or to ask sooner for private-sector help, as well as the city transit agency’s delay in invoking a full-scale emergency plan, meant that thousands of cars, trucks and buses remained mired in snow-clogged streets.

Evidence to support rumors that some sanitation workers intentionally slowed their efforts has been scant. The leaders of the two unions that represent sanitation workers and supervisors have denied that a slowdown occurred, as have Mayor Michael R. Bloomberg and the Sanitation Department’s commissioner, John J. Doherty. All would have a vested interest in deflecting blame for the problems.

City Councilman Daniel J. Halloran, a Republican of Queens, was quoted in The New York Post on Thursday saying that supervisors, bitter over recent demotions and staff reductions, told their workers to “not do the plowing of some of the major arteries in a timely manner.”

In a telephone interview that day, Mr. Halloran said three sanitation workers, including one whom he had long known and who had worked on his election campaign, told him that the message from their supervisors was not quite so explicit. They were told they would not be closely monitored and should not overwork themselves, he said, adding that the message was subtle to avoid a violation of the state’s Taylor Law, which bars public-sector unions from going on strike.

Up with predatory lending

That’s why we have the Fed — to stand up for the bankers!

The Federal Reserve is pushing a new mortgage regulation that would effectively eliminate the most powerful federal remedy for predatory lending.

The regulation would severely limit a practice called “rescission,” used to strike down demonstrably-illegal or fraudulent loan contracts and void a bank’s ill-gotten gains from such predatory lending practices. When a mortgage borrower wins a rescission case in court, the bank loses the right to foreclose, and has to give up all profits from interest and fees on the loan. The borrower still has to repay the principal — the original amount of money extended by the bank — but can’t be kicked out of the house.

Under the Fed’s new proposal, however, borrowers would be required to pay off the balance of the loan before the bank loses its right to foreclose — that means borrowers could still lose their homes, even in cases where banks have broken the law.

Unsurprisingly, banks support the move, but consumer advocates say this would essentially make rescission worthless to borrowers.

“The … proposal would eviscerate the single most effective tool that homeowners have to stop foreclosures and avoid predatory loans,” reads a letter penned by Margot Saunders of the National Consumer Law Center and signed by 16 national public interest groups, along with 33 state housing and legal aid groups and 144 individual attorneys. “Passage of the proposed rule will considerably exacerbate foreclosure statistics in this nation.”

Six Democratic senators, led by Sherrod Brown of Ohio, also urged the Fed to reconsider its rule in a Monday letter. “In this time of record foreclosures and reports of systemic problems with the operations of the largest mortgage servicers, the proposed revisions are unfortunate and unnecessary,” the letter reads. “The mortgage market needs greater oversight and accountability to restore borrower confidence lost in the mortgage crisis. The proposed rules would undermine this goal.” The signatories included outgoing Senate Banking Chairman Chris Dodd (Conn.), incoming Chairman Tim Johnson (S.D.), and Sens. Jack Reed (R.I.), Daniel Akaka (Hawaii) and Jeff Merkley (Ore.).

Of course, no one has any control over the Fed, so they’ll do whatever they want.

The retirement age is too damned high

James Galbraith with an idea that’s so sensible, it doesn’t have a chance in hell:

The most dangerous conventional wisdom in the world today is the idea that with an older population, people must work longer and retire with less.

This idea is being used to rationalize cuts in old-age benefits in numerous advanced countries — most recently in France, and soon in the United States. The cuts are disguised as increases in the minimum retirement age or as increases in the age at which full pensions will be paid.

Such cuts have a perversely powerful logic: “We” are living longer. There are fewer workers to support each elderly person. Therefore “we” should work longer.

But in the first place, “we” are not living longer. Wealthier elderly are; the non-wealthy not so much. Raising the retirement age cuts benefits for those who can’t wait to retire and who often won’t live long. Meanwhile, richer people with soft jobs work on: For them, it’s an easy call.
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