Category: Politics As Usual

For profit education

~ susie

So this is how it always works. You design a “need” that happens to coincide with what you want to sell, and then you pay some politicians to agree with you:

Reuters has the scoop on an event that took place earlier this week where nearly a hundred education profiteers — ranging from executives at testing companies to private equity moguls eager to invest in education technology — met at a swanky Manhattan club to cheer on the privatization of the U.S. education system:

The investors gathered in a tony private club in Manhattan were eager to hear about the next big thing, and education consultant Rob Lytle was happy to oblige. Think about the upcoming rollout of new national academic standards for public schools, he urged the crowd. If they’re as rigorous as advertised, a huge number of schools will suddenly look really bad, their students testing way behind in reading and math. They’ll want help, quick. And private, for-profit vendors selling lesson plans, educational software and student assessments will be right there to provide it.


Reuters goes on to note that education has become a huge business in just the past seven years. In “the venture capital world, transactions in the K-12 education sector soared to a record $389 million last year, up from $13 million in 2005.”


The policies that have allowed for these education profiteers to get involved with the system have been pushed by politicians from both parties, and many of them — such as the aggressive expansion of charter schools and high-stakes testing — have been endorsed both by President Obama and Mitt Romney, although Romney appears to be much more supportive of outright privatization.


Many of the privatization architects who attended the Manhattan confab are also political donors. According to Federal Election Commission data, Lytle was a Romney donor in 2007, giving $500. Meanwhile, Princeton Review and 2Tor’s John Katzman has spread thousands of dollars over numerous politicians from both major political parties, giving $4,800 to Sen. Michael Bennet (D-CO) while also donating tens of thousands to Sens. Harry Reid (D-NV), Kirsten Gillibrand (D-NY), Lindsey Graham (R-SC), Sam Brownback (R-KS), and others over the past decade.


Katzman has been particularly insistent in his desire to see large chunks of the education system privatized. At the event, he apparently “urged investors to look for companies developing software that can replace teachers for segments of the school day” — a convenient way for schools to do away with a number of their teachers altogether.

The problem isn’t Ed DeMarco

~ susie ~ 1 Comment

Neil Barofsky on why Ed DeMarco won’t be fired — and why he’s not the real problem with the Obama administration’s housing policy, or the economic fallout. Tim Geithner is, and ultimately, President Obama, who stands behind him:

Now, three years later, with a tightening presidential election and a Democratic base disillusioned by the government’s abandonment of its promise to help homeowners (less than 8 percent of the funds originally allocated in TARP for foreclosure relief has actually been spent), Geithner and the administration would like to present themselves as having undergone a conversion.

Let’s be very clear about what is going on here. This is not a conversion – it is a political convenience. Geithner may well be correct when he wrote in a letter to DeMarco that an effective principal reduction program would “help repair the nation’s housing market” and that the refusal to do so is not “in the best interest of the nation,” but it is his own policies that are primarily to blame for where we are today.

As we enter the final phase of the election campaign, we need to end the meaningless political posturing and recognize that as a country we have severely mishandled the housing crisis. It may be a fair debate whether we should have gone with the “all in” approach that I and others have advocated or the “do nothing and let the market find its natural bottom” approach advocated by many conservatives. There should, though, be little question that the chosen policy – a “foam the runway” approach that assisted the banks and only a fraction of the homeowners that could have benefited – has been a failure and has left us stuck in economic mediocrity. Geithner wrote this week to Demarco: “You have the power to help more struggling homeowners and help heal the remaining damage from the housing crisis.” If only he had heeded his own advice.

That’s right. Let’s call this what it is: a distraction. The administration has given nothing but lip service to the consumer side of the housing crisis, and in doing so, deepened and extended the economic crisis. They picked a side, and it was the bankers, not us. This wasn’t something the Republicans made them do: President Obama and Tim Geithner had the power to fix this. They still do.

I’ve written about Guy Saperstein before. Guy is a retired civil rights attorney who was listed as one of the Top 100 Lawyers In America, a major Democratic donor, part-owner of the Oakland A’s and a past president of the Sierra Club Foundation, and originally an enthusiastic Obama supporter. He says it’s time to squeeze Obama – not just over Ed DeMarco, but over the same housing policies Tim Geithner and President Obama have designed. The listserv email he sent is too long, so I’ll pick the most pertinent parts:

While it is comforting to believe the Obama Administration wants to do the right thing, there is too much evidence to the contrary. If the progressive community is serious about protecting home ownership as a core component of the American Dream, it needs to change tactics and raise the ante. And there is no better time to do so than in the middle of an election campaign. In fact, it is likely that if we don’t do it now, when the election is over we will have no leverage at all.

He then goes into the background of various “roads not taken” by the administration, and how they worked to undermine any progressive remedies. Oh dear, moral hazard!

This all would be bad enough, but it gets worse: The Obama Administration is still protecting banks, servicers and investors—at great cost to homeowners and home ownership. While more and more homes go into foreclosure, banks are not putting them back on the market, but are bundling and selling them to hedge funds, which are converting them to rentals. Banks and loan-servicers are subverting home ownership, while profiting from rentals, excessive late fees and foreclosure fees, while the federal government does nothing to stop the profiteering or provide serious protection for homeownership.
Continue reading “The problem isn’t Ed DeMarco” →

Another mass shooting

~ susie

Now, here’s the thing. Far too many Americans will scan this, see “Detroit” and “hip hop”, and stop reading. “Who cares when black people get shot?” is a common reaction. “It’s not in my neighorhood.”

The easy availability of guns is a big factor in the deterioration of our inner cities. This time, adult party goers – the next time, kids hit by stray bullets. And this is why Mayors Against Illegal Guns are pushing for sensible gun laws. But those who continue to make a fetish out of the 2nd Amendment stand in the way of rational solutions:

A woman who was on the Detroit Princess riverboat went to her car after getting on shore, retrieved a gun and opened fire early Monday, hitting four of her relatives and friends, officials say.


Another family member who wasn’t on the boat returned fire, critically injuring the shooter’s boyfriend as they were driving away.


Officials with the Detroit Princess say the shooting occurred around 1:15 a.m. on the shore near the boarding area behind Joe Louis Arena. An employee of the Detroit Princess was also shot in the foot and required two stitches, said Chris Clarke, general manager of the Detroit Princess.

Hypocrisy, thy name is Tim

~ susie ~ 1 Comment

Money talks, bullshit walks. My goodness, the administration is speedwalking lately! Neil Barofsky on why Ed DeMarco won’t be fired:

Although one can argue whether principal reductions are the right way to address the ongoing housing slump – I have championed principal reductions for years but acknowledge that there are passionate arguments on both sides of the issue – no one should be fooled that the administration’s entreaties to DeMarco are anything but political posturing. As I recount in my recently released book, Bailout, during my time as the special inspector general in charge of oversight of the TARP bailouts, Treasury Secretary Timothy Geithner, using the same justifications now offered by DeMarco, consistently blocked efforts to use TARP funds already designated for homeowner relief through a principal reduction program that could have a meaningful impact on the overall economy.


For example, in 2009, $50 billion in TARP funds had been committed to help homeowners through the Home Affordable Modification Program (HAMP), a program that the president announced was intended to help up to 4 million struggling families stay in their homes through sustainable mortgage modifications. Hundreds of billions more were still available and could have been used by the White House and the Treasury Department to help support a massive reduction in mortgage debt. But Geithner avoided this path to a housing recovery, explaining that he believed it would be “dramatically more expensive for the American taxpayer, harder to justify, [and] create much greater risk of unfairness.” Treasury amplified that argument in 2010, after it reluctantly instituted a weak principal reduction program in response to overwhelming congressional pressure. That program incongruously left it to the largely bank-owned mortgage servicers (and to Fannie and Freddie) to determine if such relief would be implemented. In response to our criticism that the conflicts of interest baked into the program would render it ineffective unless principal reduction was made mandatory (when in the best interests of the holder of the loan), Treasury reinforced Geithner’s early statements, refusing to do so primarily because of fears of a lurking danger: the ”moral hazard of strategic default.” The message was clear: No way, no how would Treasury require principal reduction, even when Treasury’s analysis indicated it would be in the best interest of the owner, investor or guarantor of the mortgage.


Indeed, at every critical juncture at which Treasury could have unilaterally implemented meaningful principal reduction, the same argument now presented by DeMarco was hauled out as an excuse for inaction.


Which is why it should not be surprising that rather than engage in bold action, such as replacing DeMarco with a recess appointment, the administration has responded with only a letter that seems primarily intended to distract attention from its own failed policies. The truth is that the administration – whether through principal reduction or otherwise – has never prioritized coming up with an effective approach to helping homeowners and reviving the housing market, even when it had a multi-hundred-billion-dollar TARP war chest at its disposal.


By late 2009, it was becoming apparent that HAMP would never come close to its stated goals. The program was designed poorly, and Treasury refused to hold the banks accountable for the abuses to which they subjected homeowners in the program. In one meeting I attended, after Secretary Geithner was pressed about the flaws in the HAMP program, he justified Treasury’s actions by explaining that the program would “foam the runway” for the banks by extending out the foreclosure crisis over time. In other words, Treasury was far more concerned with using HAMP to soften the blow of the housing crisis for the banks – just as the FAA once recommended spreading protective foam over a landing strip to prevent a disastrous crash of a malfunctioning airplane – than with helping millions of struggling homeowners. Now, three years later, with a tightening presidential election and a Democratic base disillusioned by the government’s abandonment of its promise to help homeowners (less than 8 percent of the funds originally allocated in TARP for foreclosure relief has actually been spent), Geithner and the administration would like to present themselves as having undergone a conversion.


Let’s be very clear about what is going on here. This is not a conversion – it is a political convenience. Geithner may well be correct when he wrote in a letter to DeMarco that an effective principal reduction program would “help repair the nation’s housing market” and that the refusal to do so is not “in the best interest of the nation,” but it is his own policies that are primarily to blame for where we are today.


As we enter the final phase of the election campaign, we need to end the meaningless political posturing and recognize that as a country we have severely mishandled the housing crisis. It may be a fair debate whether we should have gone with the “all in” approach that I and others have advocated or the “do nothing and let the market find its natural bottom” approach advocated by many conservatives. There should, though, be little question that the chosen policy – a “foam the runway” approach that assisted the banks and only a fraction of the homeowners that could have benefited – has been a failure and has left us stuck in economic mediocrity. Geithner wrote this week to Demarco: “You have the power to help more struggling homeowners and help heal the remaining damage from the housing crisis.” If only he had heeded his own advice.

You will be assimilated

~ susie ~ 3 Comments

I read this post by author Barry Eisler, and it reminded me of this.

I have a friend – several friends, actually – who have been invited to the White House. One in particular argues with me ever since I told him I would “never” go to the White House if I were invited. (By any president, not just this one.) He seemed to think I was grandstanding, but would backtrack if it ever actually happened.

“You don’t know me as well as you think you do,” I told him.

“So the president of the United States calls you up, says, ‘Susie, I want you and a handful of other bloggers to meet with me to talk about some current issues, I’d like to hear your thoughts,’ you wouldn’t go,” he said, scornful. “You wouldn’t want to tell your grandchildren you were invited to the White House.”

“Nope. Absolutely not.”

“I don’t believe you.”

I told him he forgot I’d been a reporter for 20 years, and that to me, this is just work, not ego fodder. I said I was very conscious of the power dynamic between journalists and politicians, and the only reason the president would want to talk to bloggers is if we presented a public relations problem – that the purpose of any meeting would be to make his positions more sympathetic to us, and thus mute our criticisms. “There would simply be no point,” I said. “That’s why you don’t have anything to do with people you cover.”

“So if I called and asked if you would go with me to the White House Christmas party, you wouldn’t go.”

“Oh, I would go to that,” I said.

“So you would sell out. What’s the difference?”

“First of all, I wouldn’t be the one invited – you would. I wouldn’t be there in any official capacity, so I wouldn’t be compromising my integrity. And I hear the food is really good.”

“So you’re a hypocrite. You’d go for one thing and not the other.”

“You’re not listening to me, and if you can’t tell the difference, I can’t explain it to you.”

We’ve had some variation of this conversation a dozen times, at least.

See, the big thing that I have going for me (and the thing that makes me a more candid blogger than most) is that I absolutely hate blogging. I hate having to follow all this depressing news, I hate seeing other bloggers rationalize things in this administration we attacked mercilessly in the last, and I hate how my day (and week) never ends. I hate how my hands and arms hurt all the time.

So when I know something, I tell you. I’m not worried about whether I’ll get invited on a White House conference call (haven’t been on one in two years, gee I wonder why?) or whether I get to go on MSNBC. (I assure you, I won’t.) What I will do is give you my best take on the news, tempered by my own journalism background, my circle of contacts and a brief but highly informative experience on a high-powered political campaign.

And because I have no ulterior motive, no goal other than trying to figure out what’s going on and how it will affect people like us, you will probably get a more accurate idea of what’s happening. I mean, sometimes I’m wrong or I just don’t have any relevant information, but if I don’t, I’ll tell you that, too.

If you’re someone who wants to know those things, I hope you continue to support me. It’s worth something.

A lecture on morals from the amoral elite

~ susie

On yesterday’s This Week With Mickey Mouse, a variety of well-heeled people join in a hearty chorus of “What Do The Simple Folk Do?”. Isn’t that nice!

JONES: Well, then why — it’s certainly not being revealed. But hold on a second. This is the kind of stuff I think that turns people off from politics. I mean, this is exactly the problem we have right now. Ordinary people don’t care about this stuff. And the stuff that regular people care about more than anything is, you know, their houses. Right now, one third of the people who are watching this show, their homes are under water.


It used to be, they were talking about the good old days earlier on the show. It used to be when you signed that mortgage check, you were building wealth for your family. You got a third of Americans who are losing wealth, and in Washington, D.C., the big story that was missed, you got Ed DeMarco, a Bush administration holdover, who is still being held on to by Obama, who sits back and says, Fannie and Freddie are now–


STEPHANOPOULOS: He’s the head of the Federal Housing Administration.


JONES: The Federal Housing Administration.


STEPHANOPOULOS: Oversees Fannie and Freddie. Fannie and Freddie came up with a report that said if they just reduced some of these mortgages and gave some mortgage relief and stopped overcharging people for their homes, America would save $1 billion in foreclosures and you keep people in their houses. This one bureaucrat says, no way, takes it off the table. That’s wrong. That’s hurting ordinary Americans. It’s not even being talked about in Washington, D.C. President Obama should fire Ed DeMarco, get him out of there, but somebody in office is going to take care of the real issues. The American people can’t continue to lose their shirts trying to get people to stay in their houses.

(CROSSTALK)


STEPHANOPOULOS: — didn’t do more about that? I know he disagrees, I know he disagrees with Ed DeMarco, but he didn’t take action.


RATTNER: Well, look, the housing situation is one of the most complicated policy issues we have, because we all would like to do more for homeowners, but I think there’s a feeling in America, which I understand, of sort of equity in the sense that someone who overborrowed, who took out a second mortgage, used it to buy a new television or consume, is now under water, is living next door to somebody who acted responsibly and didn’t take out a second mortgage. And so this is a highly emotional issue in Washington.


What he means is, the “responsible” people who had well-paying jobs and enough inherited wealth that they didn’t need to use their houses as ATMs to cover up the declining purchasing power of their paychecks.

Steve Rattner is probably not the person to lecture the rest of us about moral hazard.

JONES: The great thing about the report that came out was, if you narrowed it to people who are not in that situation, you would actually save $1 billion for America. So you’ve taken it off the table, you’re not talking about people who overborrowed. You’re talking about the responsible people. They can’t get help from this administration, they can’t get help from Washington, D.C. That’s why you are going to have underwater voters sitting out this election in droves. That hurts the president. And their inability to be a part of the economy hurts the economy. You’ve got more jobs created–

I get the political strategy behind what Van Jones is saying, but to divide distressed homeowners into “good” (responsible) homeowners versus “bad” (irresponsible) ones is, in face of the overwhelming evidence of fraud and corruption on the part of the banks, rationalizing class war. We already know that black homeowners who qualified for traditional mortgages were steered into the subprime markets. This is not a matter of rational dispute.

COULTER: — families. I think they’re whole house flippers. You noticed that in the housing crisis — they won’t give you the numbers. How many of these houses that are under water are second homes. But noticeably, all the housing crisis hot spots — Arizona, Nevada, California, Florida — not New York City, it’s the hot spots–

(CROSSTALK)


WILL: 75 percent of mortgage holders who are under water are continuing to pay their mortgages. If you go to them now with competitive debt forgiveness — the president saying that maybe student loans should now be forgiven. Now we’re going to start forgiving this, breaking contracts — in a sense what they are — then you’re going to have a classic case of moral hazard, where the incentives are for perverse behavior, and you’re going to incentivize the 75 percent of honorable people paying their mortgages to stop.


A lecture on morals from the bow-tie-wearing buffoon whose previous wife tossed all his belongings onto the lawn when she found out he was cheating on her with his now-wife! But seriously, this is a guy who sold whatever he had by way of intellectual consistency a long, long time ago. There is not a Republican policy he can’t prop up with one rationale or another. He can get himself worked up into quite the moral froth over the corrupting influence of money in college sports, but remain strategically silent over the bankers who actually put us into this economic tailspin – and the Republicans who kept us in this mess.


What about that perverse behavior, George? It seems you only care about the behavior of the rabble. Funny, that.

Virtually Speaking Sunday

~ susie

Virtually Speaking Sundays: Jay Rosen, Stuart Zechman and Jay Ackroyd talk about the Media as “Church of the Savvy, the Broder Brand, the ideology of the press corps and setting the stage to junk Social Security.

Listen here 

Part 1: Jay Rosen professor of Journalism at NYU (@jayrosen_nyu) and Stuart Zechman (@Stuart_Zechman), in a rerun of a discussion that took place on April 10, 2011.

Part 2: Stuart and Jay  discuss how the media cover politics. Very timely coming into the home stretch of the presidential election campaigns.

Plus this week’s Ridiculous Moment from Culture of Truth

Join the studio audience in Second Life: http://slurl.com/secondlife/Virtually%20Speaking/162/162/25