Archive for the ‘Election’ Category
A good example of government failing to its job of “ensuring the general welfare”: Why Student Debtors Go Unrescued
A vast majority of the more than 10 million Americans who have defaulted on or are behind on repaying their student loans could have benefited from income-driven repayment plans that are intended to ease pressure on distressed borrowers and keep them from defaulting on their federal loans.
These plans can allow borrowers with low income or high debt — or both — to pay less each month, or even nothing, until their finances improve without being penalized or going into default. But many borrowers never even hear about these payment plans, thanks to poor customer service by the companies that are paid more than $600 million a year by the government to manage these accounts, process monthly payments and enroll distressed borrowers in alternative repayment plans.
As a result, borrowers who could easily have been spared slip into default. The government needs to demand more from these companies, which have operated with little oversight and have clearly been failing borrowers for a long time.
The Consumer Financial Protection Bureau, which has primary authority over the industry, has now issued a disturbing report on this problem. It can’t delay and should get the ball rolling by suing companies that violate the law and writing consumer-friendly rules that loan servicing companies would be legally required to follow.
The bureau’s report — drawn from 30,000 public comments filed with the agency from May to July — suggests that some servicers are actually pushing struggling borrowers toward default by giving them misinformation, by making it difficult for them to refinance at lower rates and by withholding valuable information about affordable payment plans that are in the struggling borrower’s best interest.
Instead of explaining how income-based payment plans protect the borrower’s credit, loan servicers sometimes tell people that their only options are to pay the full amount due or go into forbearance — a process in which the person can stop paying for a specified time, though the interest generally continues to accrue and the loan balance grows.
In some cases, borrowers reported, servicers chose to . . .
Continue reading. Definitely keep reading.
Think what this accumulated educational debt is doing: wringing money from those barely able to pay, blighting them with constant finacial worry. That has a real 19th Century sound, doesn’t it? (Think Scrooge (financial institutions) and Bob Cratchit—only our Scrooge is unvisited by ghosts.)
But of course that burden is exactly what is being imposed by student loan debt—and the government does nothing to help. Those struggling most with the debt and payments? They’re virtually all of voting age. If they networked, using the things available now: email, hangouts, Skype, private forums, and so on, they would be a very substantial voting bloc—particularly if they actually all vote: since most people do not vote these days, the power of each individual vote—each vote actually cast—is magnified. Thus the voting block of highly-indebted young adults (who, BTW, are pushed by the debt to struggle to be highly compensated, since it’s the only solution in sight), IF it organizations and acts, could exert quite a bit of political pressure—perhaps enough to push the government to do its job and work on behalf of the people and their general welfare, as it’s supposed to do (not helping business clamp down harder—but that seems to be a strong tendency, almost as if the politicians in question were heavily funded by the interests they protect.
UPDATE: It’s perhaps too obvious to state, but this burden falls disproportionately on the poor: the poorer you are, the more financial help you need with college costs (in general) and so the bigger burden you carry after college. It’s like the way the police, prosecutors, and courts in St. Louis County (and elsewhere) focused their policing and arrests on poor neighborhoods, to siphon money from the poor, who lacked the financial and legal resources available to those with higher incomes.
Very interesting article in Medium by Steven Levy:
During Carly Fiorina’s triumphant performance in the wretched carnival that was the second Republican debate, she picked the perfect moment to play the Steve Jobs card. The subject had turned to her tenure as the CEO of HP, the single aspect of her resume that vaguely qualifies her as a presidential candidate. Industry observers have contended that she did her job poorly, and, indeed, when the board dismissed her in 2005, HP’s stock price rose by seven percent. Meanwhile, Fiorina fell to earth with the aid of a $40 million golden parachute.
Her comeback to this at the debate? Steve Jobs was on her side! She shared a story — which may well be true — about how Apple’s late CEO had called to remind her that he had been fired as well, and it wasn’t the end of the world. “Been there, done that — twice,” he told her. Unlike Jobs, however, Fiorina did not go on to start a company, buy another small company and sell it for billions, or return to the place that fired her and restore it to glory. But the point of the story was that Steve was on her side, and by aligning herself with the sainted innovator, Fiorina racked up triple-bonus debate points.
Ms. Fiorina’s trainwreck stint at HP has been well documented. But I want to address one tiny but telling aspect of her misbegotten reign: an episode that involved her good friend Steve Jobs. It is the story of the HP iPod.
The iPod, of course, was Apple’s creation, a groundbreaking digital music player that let you have “a music library in your pocket.” Introduced in 2001, it gained steam over the next few years and by the end of 2003, the device was a genuine phenomenon. So it was news that in January 2004, Steve Jobs and Carly Fiorina made a deal where HP could slap its name on Apple’s wildly successful product. Nonetheless, HP still managed to botch things. It could not have been otherwise, really, because Steve Jobs totally outsmarted the woman who now claims she can run the United States of America.
I can talk about this with some authority. Not only have I written a book about the iPod, but I interviewed Fiorina face to face when she introduced the HP iPod at the 2004 Consumer Electronics Show, and then got Steve Jobs’s side of the story.
It was at CES that year that HP announced its version of the iPod. That in itself was pathetic. The company’s motto at the time was Invent! But at the biggest event of the technology world, HP’s big newsmaking announcement was that it was selling someone else’s invention. Nonetheless in our interview on January 8, just off the show floor, Fiorina boasted about cobranding the iPod as if it were an innovative coup for her own company.
Apple chose her company, she told me, “Because HP is a company that’s an innovator. We believe innovation is our lifesblood. It’s why INVENT sits on our logo.” So why sell someone else’s product? She described her strategy as “focused innovation.” Apparently this meant throwing in the towel when a competitor came up with something really good.
It didn’t seem like a recipe for success, and indeed, HP was not successful at it, for a number of reasons. But before I get to that, let’s contemplate what Apple got in return for allowing HP to rebrand iPods and share the loot. HP agreed to pre-load Apple’s iTunes music software and store into its personal computers. This was a hugely valuable concession. Apple had only recently begun to push this key software into the Windows world. Millions of HP/Compaq customers would instantly become part of Apple’s entertainment ecosystem.
If it were a straight deal for HP to include Apple’s software, the fee might have been hundreds of millions of dollars. (Around that time, software companies were paying huge sums to have their products or services preinstalled, since people seldom deleted them and often used the default choices.) Even better, preinstalling iTunes was a way for Apple to stifle Microsoft’s competitor to the iTunes Music Store. As an Apple leader at the time puts it, “This was a highly strategic move to block HP/Compaq from installing Windows Media Store on their PCs. We wanted iTunes Music store to be a definitive winner. Steve only did this deal because of that.”
One might even argue that since Carly Fiorina wasn’t making much profit from selling computers, each machine her company sold under this deal delivered more value to Apple than it did to HP.
In return, HP got the right to sell iPods. But not in a way that could possibly succeed. Fiorina boasted to me that she would be able to sell the devices in thousands of retail outlets; up to that point Apple mostly sold them online and in its own stores. But by the time in mid-2004 that HP actually began selling its branded iPods, Apple was expanding to multiple retail outlets on its own. And soon after HP began selling iPods, Apple came out with new, improved iPods — leaving HP to sell an obsolete device. Fiorina apparently did not secure the right to sell the most current iPods in a timely fashion, and was able to deliver newer models only months after the Apple versions were widely available.
So it was no wonder that even at the program’s peak, it represented no more than about five percent of total iPod sales.
Even with a detail like the color of the iPod, Jobs totally rolled over Fiorina. . .
Continue reading. There’s more.
Paul Krugman writes in today’s NY Times:
So Donald Trump has unveiled his tax plan. It would, it turns out, lavish huge cuts on the wealthy while blowing up the deficit.
This is in contrast to Jeb Bush’s plan, which would lavish huge cuts on the wealthy while blowing up the deficit, and Marco Rubio’s plan, which would lavish huge cuts on the wealthy while blowing up the deficit.
For what it’s worth, it looks as if Trump’s plan would make an even bigger hole in the budget than Jeb’s. Jeb justifies his plan by claiming that it would double America’s rate of growth; The Donald, ahem, trumps this by claiming that he would triple the rate of growth. But really, why sweat the details? It’s all voodoo. The interesting question is why every Republican candidate feels compelled to go down this path.
You might think that there was a defensible economic case for the obsession with cutting taxes on the rich. That is, you might think that if you’d spent the past 20 years in a cave (or a conservative think tank). Otherwise, you’d be aware that tax-cut enthusiasts have a remarkable track record: They’ve been wrong about everything, year after year.
Some readers may remember the forecasts of economic doom back in 1993, when Bill Clinton raised the top tax rate. What happened instead was a sustained boom, surpassing the Reagan years by every measure.
Undaunted, the same people predicted great things as a result of George W. Bush’s tax cuts. What happened instead was a sluggish recovery followed by a catastrophic economic crash.
Most recently, the usual suspects once again predicted doom in 2013, when taxes on the 1 percent rose sharply due to the expiration of some of the Bush tax cuts and new taxes that help pay for health reform. What happened instead was job growth at rates not seen since the 1990s.
Then there’s the recent state-level evidence. Kansas slashed taxes, in what its right-wing governor described as a “real live experiment” in economic policy; the state’s growth has lagged ever since. California moved in the opposite direction, raising taxes; it has recently led the nation in job growth.
True, you can find self-proclaimed economic experts claiming to find overall evidence that low tax rates spur economic growth, but such experts invariably turn out to be on the payroll of right-wing pressure groups (and have an interesting habit of getting their numbers wrong). Independent studies of the correlation between tax rates and economic growth, for example by the Congressional Research Service, consistently find no relationship at all. There is no serious economic case for the tax-cut obsession.
Still, tax cuts are politically popular, right? Actually, no, at least when it comes to tax cuts for the wealthy. According to Gallup, only 13 percent of Americans believe that upper-income individuals pay too much in taxes, while 61 percent believe that they pay too little. Even among self-identified Republicans, those who say that the rich should pay more outnumber those who say they should pay less by two to one.
So every Republican who would be president is committed to a policy that is both demonstrably bad economics and deeply unpopular. What’s going on?
Well, consider the trajectory of Marco Rubio, who may at this point be the most likely Republican nominee. Last year he supported a tax-cut plan devised by Senator Mike Lee that purported to be aimed at the poor and the middle class. In reality, its benefits were strongly tilted toward high incomes — but it still drew harsh criticism from the right for giving too much to ordinary families while not cutting taxes on top incomes enough.
So Mr. Rubio came back with a plan that eliminated taxes on dividends, capital gains, and inherited wealth, providing a huge windfall to the very wealthy. And suddenly he was gaining a lot of buzz among Republican donors. The new plan would add trillions to the deficit, which conservatives claim to care about, but never mind.
In other words, it’s straightforward and quite stark: Republicans support big tax cuts for the wealthy because that’s what wealthy donors want. No doubt most of those donors have managed to convince themselves that what’s good for them is good for America. But at root it’s about rich people supporting politicians who will make them richer. Everything else is just rationalization. . .
. . . I do want to weigh in for a minute on Donald Trump’s tax plan — which would, surprise, lavish huge cuts on the wealthy while blowing up the deficit. That’s in contrast to Jeb Bush’s plan, which would lavish huge cuts on the wealthy while blowing up the deficit, and Marco Rubio’s plan, which would lavish huge cuts on the wealthy while blowing up the deficit.
At this point there are no Republican candidates deviating at all from the usual pattern. Why, it’s almost as if nobody in the party ever cared about deficits except as an excuse to slash social spending, and is totally committed to redistributing income upward.
And there is, of course, no evidence — zero, nada, zilch — that cutting taxes on the rich will yield large economic benefits.
What we’re seeing here is a party completely incapable of reforming …
A crusty Down Easter made a purchase at a hardware store and was staring hard at the change he was given. The clerk asked, “That’s the correct change, isn’t it?” The grudging reply was “Just barely.”
I was reminded of this by how the NY Times reported a recent story on Hillary Clinton, who is (too) frequently the object of animus from the Times.
The “story,” if you can call it that, is that a Clinton adviser did exactly the proper thing and removed herself from a discussion to avoid any potential conflict of interest.
That’s a news story? If the Times thinks that’s a story, then I have a great news story for them about how a bus full of people avoided crashing into a train!!! The bus came to a stop at the barrier as the train rushed by. Upwards of 50 people might have been killed! The bus was only 20 feet from the train!
That’s the sort of thing that passes for news at the NY Times these days.
The Times devoted 652 words to telling us that a conflict of interest did not arise. Was it a slow news day? Is it a way of breaking in reporters gently: first they report on things that did not happen and then later, as they gain experience, they report on things that do happen?
I think it’s just a particularly naked display of the Times’ traditional Clinton hatred—cf. Whitewater…
Of course, the GOP has devoted a lot of time and effort to prevent the poor from voting: shorter hours, fewer polling places, fewer voting stations, photo-ID requirements, no same-day registration, etc. And it seems to work (in the sense that the poor vote at lower rates). But if you look at this article, the US voting rate is not all that good for any group. From the article:
More charts at the link.