The new poors

I was complaining to a friend who is part of the D.C. consultancy class (although not the rich part). “What is it with all this crap about the middle class?” I said. “No one in that entire convention talked about the poor or the working class.” My friend said that poor people preferred to think of themselves as middle class, even when they’re not, and that it probably polled better.

“Really?” I said, surprised. “Because I don’t know many people who still describe themselves as middle class. I know a lot of people who describe themselves as poor.” This Pew survey bears out my impression:

The percentage of Americans who say they are in the lower-middle or lower class has risen from a quarter of the adult population to about a third in the past four years, according to a national survey of 2,508 adults by the Pew Research Center.


Not only has the lower class grown, but its demographic profile also has shifted. People younger than 30 are disproportionately swelling the ranks of the self-defined lower classes.1 The shares of Hispanics and whites who place themselves in the lower class also are growing.


Among blacks, the story is different. The share of blacks in the lower class has not changed in four years, one of the few demographic groups in which the proportion in the lower classes did not grow. As a consequence, a virtually identical share of blacks (33%) and whites (31%) now say they are in the lower class.


When it comes to political affiliation, more Democrats than Republicans place themselves in the lower classes, but Republicans saw a sharper rise over the past four years. Some 23% now call themselves lower class, up from 13% in 2008. Among Democrats, 33% now call themselves lower class, compared with 29% in 2008.


The survey finds that hard times have been particularly hard on the lower class. Eight-in-ten adults (84%) in the lower classes say they had to cut back spending in the past year because money was tight, compared with 62% who say they are middle class and 41% who say they are in the upper classes. Those in the lower classes also say they are less happy and less healthy, and the stress they report experiencing is more than other adults.


As they look to their own future and that of their children, many in the lower class see their prospects dimming. About three-quarters (77%) say it’s harder now to get ahead than it was 10 years ago. Only half (51%) say that hard work brings success, a view expressed by overwhelming majorities of those in the middle (67%) and upper classes (71%). While the expectation that each new generation will surpass their parents is a central tenet of the American Dream, those lower classes are significantly more likely than middle or upper-class adults to believe their children will have a worse standard of living than they do.

Study: Banks refusal to modify caused the foreclosure crisis

I know you will be as shocked as I am:

Just how many more people could have qualified under the administration’s mortgage modification program if the banks had done a better job? In other words, how many people have been pushed toward foreclosure unnecessarily?


A thorough study released last week provides one number, and it’s a big one: about 800,000 homeowners.


The study’s authors — from the Federal Reserve Bank of Chicago, the government’s Office of the Comptroller of the Currency (OCC), Ohio State University, Columbia Business School, and the University of Chicago — arrived at this conclusion by analyzing a vast data set available to the OCC. They wanted to measure the impact of HAMP, the government’s main foreclosure prevention program.


What they found was that certain banks were far better at modifying loans than others. The reasons for the difference, they established, were pretty predictable: The banks that were better at helping homeowners avoid foreclosure had staff who were both more numerous and better trained.


Unfortunately for homeowners, most mortgages are handled by banks that haven’t been properly staffed and thus have modified far fewer loans. If these worse-performing banks had simply modified loans at the same pace as their better performing peers, then HAMP would have produced about 800,000 more modifications. Instead of about 1.2 million modifications by the end of this year, HAMP would have resulted in about 2 million.


That’s still well short of the 3-4 million modifications President Obama promised when he announced the program back in early 2009. But it’s a big difference, and a reasonable, basic benchmark against which to compare the program’s failings.


The report does not identify these poor performing banks, but it’s not hard to ID them. A “few large servicers [have offered] modifications at half the rate of others,” the authors say. The largest mortgage servicers are Bank of America, JPMorgan Chase, Wells Fargo and Citi.


Bank of America in particular (the largest of all the servicers when HAMP launched) has been far slower to modify loans than even the other large servicers, as other analyses we’ve cited haveshown.

9/11 victim dies in U.S. custody

But it’s not polite to talk about this particular victim:

Adnan Latif, a mentally incapacitated man wrongly swept up in Pakistan in 2001 and shipped to Guantanamo, has died, the Pentagon announced today. Latif was ordered releasedin 2010 — because, you know, he was innocent — but President Obama refused and kept him locked in the Cuban prison, where he had been repeatedly tortured. Latif’s death comes after an intensive hunger strike and at least one suicide attempt. Did we mention he was innocent? Or, as the Pentagon put it: “Latif arrived at Guantanamo in January 2002 and was being detained consistent with the law of war…Joint Task Force Guantanamo continues to provide safe, humane, legal and transparent care and custody of detainees.” His lawyer, David Remes, remembers Latif, who, dead at 32, spent more than a third of his life in Guantanamo: “Slightly built and gentle, he was a father and husband. He was a talented poet, and was devoutly religious. He never posed a threat to the United States, and he never should have been brought to Guantanamo. The military has not stated a cause of death. However Adnan died, it was Guantanamo that killed him. His death is a reminder of the human cost of the government’s Guantanamo detention policy and underscores the urgency of releasing detainees the government does not intend to prosecute.”

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