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A good example of government failing to its job of “ensuring the general welfare”: Why Student Debtors Go Unrescued

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The editorial board of the NY Times:

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.

Written by LeisureGuy

7 October 2015 at 7:39 pm

How Our Constitution Indulges the Great Conservative Fantasy

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A very interesting post at Mother Jones by Kevin Drum:

A few days ago Matt Yglesisas wrote a #Slatepitch piece arguing that Hillary Clinton “is clearly more comfortable than the average person with violating norms and operating in legal gray areas”—and that’s a good thing. In a nutshell, Democrats can’t get anything done through Congress, so they need someone willing to do whatever it takes to get things done some other way. And that’s Hillary. “More than almost anyone else around, she knows where the levers of power lie, and she is comfortable pulling them, procedural niceties be damned.”

Unsurprisingly, conservatives were shocked. Shocked! Liberals are fine with tyranny! Today Matt responded in one of his periodic newsletters:

A system of government based on the idea of compromises between two independently elected bodies will only work if the leaders of both bodies want to compromise. Congressional Republicans have rejected any form of compromise, so an effective Democratic president is going to try to govern through executive unilateralism. I don’t think this is a positive development, but it’s the only possible development.

I don’t think I’m as pessimistic as Yglesias, but put that aside for a moment. Look at this from a conservative point of view. They want things to move in a conservative direction. But compromise doesn’t do that. In practice, it always seems to move things in a more liberal direction, with a few conservative sops thrown in that eventually wither away and die. This leaves them with little choice except increasingly hard-nosed obstructionism: government shutdowns, debt ceiling fights, filibusters for everything, voter ID laws, etc. etc.

And there’s a lot of truth to this to this view. The entire Western world has been moving inexorably in a liberal direction for a couple of centuries. It’s a tide that can’t be turned back with half measures. Conservative parties in the rest of the world have mostly made their peace with this, and settle for simply slowing things down. American conservatives actually want to reverse the tide.

That’s all but impossible in the long term. It’s just not the way the arc of history is moving right now. But American conservatives are bound and determined to do it anyway.

This is the fundamental problem. British conservatives, in theory, could turn back the clock if they wanted to, but they don’t. Their parliamentary system allows them to do it, but public opinion doesn’t. If they want to retain power, there’s a limit to how far they can fight progress. If American conservatives were in the same situation, they’d probably end up in the same place. Once they actually got the power to change things, they’d very quickly moderate their agenda.

It’s in this sense that our system of governance really is at fault for our current gridlock. Not directly because of veto points or our presidential system or any of that, but because these features of our political system allow conservatives to live in a fantasy world. They dream of what they could do if only they had the political power to do it, and they really believe they’d do it all if they got the chance. Thanks to all those veto points, however, they never get the chance. Full control of the government would disabuse everyone very quickly of just how far they’re really willing to go, but it never happens.

We are living through an era in which conservatives are living a fantasy that can never be. But our system of governance denies them the chance to test that fantasy. So it continues forever. . .

Continue reading.

Written by LeisureGuy

7 October 2015 at 3:23 pm

Posted in Congress, GOP, Government, Law

Loretta Lynch: government shouldn’t require reports of people killed by police

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Loretta Lynch doesn’t make any sense on this issue, and she’s the Attorney General. While Eric Holder seems to have taken as his signature mission protecting Wall Street and ensuring that no one in the financial community faced any accountability, Lynch is starting a program to allow the police to do whatever they want without accountability, and that begins with ensuring that what the police do is kept secret: no reports of people killed by police.

Ciara McCarthy reports in the Guardian:

Attorney general Loretta Lynch says the federal government should not require police to report fatal shootings of civilians, sharply diverging from her predecessor Eric Holder’s stance on police killings.

In a conversation with NBC journalist Chuck Todd on a range of criminal justice issues, Lynch said on Thursday that she does not support a federal mandate to report people killed by police.

“One of the things we are focusing on at the Department of Justice is not trying to reach down from Washington and dictate to every local department how they should handle the minutia of record keeping, but we are stressing to them that these records must be kept,” she said at the Washington Ideas Forum, hosted by AtlanticLIVE and the Aspen Institute.

Lynch said the Justice Department does “encourage” local departments to maintain records on police shootings but that improving police-community relations is more important. She noted that the small size of the average police department could make record-keeping difficult. . .

Continue reading.

It seems obvious (though apparently not to Lynch) that keeping records and maintaining transparency would improve police-community relations. It seems very much as though she has not thought this through and is taking the typical prosecutorial stance of protecting the police automatically.

Eric Holder, her predecessor, was quite clear on the need for keeping records and on how that would help police-community relations. From later in the same article:

. . . Lynch’s statements show a sharp contrast from her predecessor’s position on tracking police violence. Holder, the former attorney general who left office in April, has called the lack of official data “unacceptable”. Before leaving office he called its collection the “first step” toward improving police-community relations.

“I’ve heard from a number of people who have called on policymakers to ensure better record-keeping on injuries and deaths that occur at the hands of police. I’ve also spoken with law enforcement leaders – including the leadership of the Fraternal Order of Police – who have urged elected officials to consider strategies for collecting better data on officer fatalities,” Holder said in January. “Today, my response to these legitimate concerns is simple: We need to do both.” . . .

UPDATE: If I follow Loretta Lynch’s argument, she is saying that having the police record and report those they kill will be a great burden on police departments because they kill so many. Right? And she’s talking about small police departments not being able to do the recordkeeping, presumably because those small departments are killing so many people that keeping track would be a burden.

Written by LeisureGuy

7 October 2015 at 3:14 pm

How can we get rid of bad prosecutors?

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Radley Balko writes in the Washington Post, under the title “When public officials can’t be bothered with innocence“:

Back on my old blog, I ran an annual “Worst Prosecutor of the Year” poll. It’s a tradition I’ll revive here at The Watch later this year. Two of the perennial nominees are Mississippi Attorney General Jim Hood and Cook County (Ill.) State’s Attorney Anita Alvarez. They’re both worthy contenders.

For just about his entire time in the AG’s office, Hood has done all he can to paper over the massive damage done to Mississippi’s criminal justice systemby longtime medical examiner Steven Hayne and his bite mark analyst sidekick, Michael West. Alvarez’s sins include, among other things,charging people who record police officers with felonies, including one woman who tried to record cops who intimidated her when she tried to report another cop for assaulting her; fighting like mad to preserve a patently unjust civil asset forfeiture law; and working to keep convicts in prison after DNA had excluded them as the perpetrator of the crimes for which they were convicted.

Both Hood and Alvarez are back in the news this week in stories about cases involving likely innocence. And both are acting as their careers thus far might predict.

With Hood, it’s an old case that he actually prosecuted back when he was a district attorney. In 2001, Marlon Howell was convicted of shooting and killing New Albany, Miss., resident Hugh David Pernell. There was no biological evidence linking Howell to the crime. The only real evidence against him was from eyewitnesses — two men who confessed to involvement in the shooting and were spared the death penalty, and from an uninvolved eyewitness named Charles Rice, who claimed to have seen the killing. Rice’s testimony is obviously the most compelling. But it was problematic, and not just because he claimed to have seen the pre-dawn shooting from his window, which was more than 70 feet away. Over at Vice,Spencer Woodman explains:

Hood had no physical evidence linking Howell to the crime. And Charles Rice, the man who’d seen the shooting from his home, was the only eyewitness not facing execution. He became the sturdiest pillar of Hood’s case.

To buttress Rice’s identification, police chief David Grisham told the jury that although the sun had not yet risen at the time of Pernell’s shooting, “the sky was lighting up” and street lights and car lights would “greatly enhance your vision.” A medical examiner told the court that the bullet traveled through Pernell’s body in a manner consistent with what Rice claimed to have seen. Other forensic experts explained how common it is to lack physical evidence, like fingerprints or gunshot residue, linking a murderer to his crime. Grisham also told the court that Howell had a defense attorney present at the lineup, which generally would be required by state law to ensure that the process is fair.

Except that wasn’t true.

Mississippi state law generally grants criminal suspects the right to have an attorney present when facing a lineup. In 2001, Grisham, New Albany’s police chief, told the court that Reagan Russell, a local defense attorney, had represented Howell at the lineup. After Richardson discovered this to be false in 2005, Grisham filed a sworn statement asserting that a different attorney, Thomas McDonough, had been present. This also turned out to be untrue, which both defense lawyers asserted in affidavits for Richardson and confirmed to VICE. Howell had no representation at the lineup. (Grisham declined to comment on this matter.)

You’d think that Hood would be troubled that a police chief would swear that a particular defense attorney was present at the lineup who clearly wasn’t there. You’d think he’d be really troubled when that same police chief would then swear that a different defense attorney was present . . . and be wrong about that too. Instead, Hood threatened perjury charges against the girlfriend of one of the men who implicated Howell, because her testimony supported Howell’s defense.

Despite assertions from state authorities that Howell had representation, they never found a defense attorney who could confirm he was there. Why does that matter? Because these lineups can be rigged. And it appears Howell’s was. Howell was easily the tallest person in the lineup, and he was the only person wearing shoes — the others were wearing identical pairs of sandals. (You can view a photo of the lineup here.) You really don’t need to know anything about the case to look at that photo and know that he’s the guy the cops suspected.

There’s lots more to the story, which I recommend reading in full. Howell has an alibi. Rice has since recanted. And then un-recanted after pressure from Hood’s office. Howell is black, the victim was white. Howell was convicted by an all-white jury.

The bottom line? A man was convicted and sentenced to death based on a ridiculous lineup and testimony from two admitted criminals who had a whole lot to gain. He’s still on death row. And the attorney general of Mississippi is doing all he can to ensure that the man will be executed.

The story involving Alvarez comes from Buzzfeed. It’s a doozy, too. . .

Continue reading.

Written by LeisureGuy

6 October 2015 at 6:09 pm

Two critical reports on Ben Bernanke

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Perhaps of interest: Two jaundiced looks at Ben Bernanke prompted by his recent book:

David Dayen reports in The Intercept:

Former Federal Reserve Chair Ben Bernanke joined practically everyone in America by saying in his new memoir, The Courage to Act, that more Wall Street executives should have gone to jail for criminal misconduct that led to the financial crisis.

“It would have been my preference to have more investigation of individual action, since obviously everything what went wrong or was illegal was done by some individual, not by an abstract firm,” he wrote.

Unlike practically everyone else in America, however, Bernanke in a pretty good position to actually facilitate criminal misconduct proceedings, if he wanted to see them so badly — as  head of the nation’s most powerful bank supervisory agency from 2006 to 2014.

The Fed, like all banking regulators, can initiate criminal referrals to the Justice Department for individuals they find to have broken the law. This acts as the first line of defense to discipline criminal misconduct on Wall Street.

But such activities were absent during the period when Bernanke was chair, according to criminologist and law professor Bill Black. “The Federal Reserve appears to have made zero criminal referrals; it made three about discrimination,” Black told Bill Moyers in 2013.

And when Bernanke took action, his stumbling attempts at accountability weren’t just inadequate; they were absurd. The one major action his Federal Reserve took regarding specific conduct regarding the financial crisis wound up as the most embarrassing display of fake accountability in the history of the Obama Administration.

The mortgage securitization process that fed the housing bubble and generated the financial crisis also led to widespread foreclosure fraud, and in April 2011, the Fed, along with the Office of the Comptroller of the Currency, issued enforcement orders against ten major banks over “misconduct and negligence related to deficient practices in residential mortgage loan servicing and foreclosure processing.” . . .

Continue reading.

Pam Martens and Russ Martens write in Wall Street on Parade:

Will the American people ever get an honest writing of the 2008-2009 Wall Street collapse? If you think it is to be found in the new book released on Monday by former Fed Chairman Ben Bernanke (which we seriously doubt you are thinking) you will be disappointed.

What you will find in Bernanke’s book are photos of his grandparents, a photo of theTime Magazine cover with himself named “Man of the Year,” a photo of Bernanke with the masterminds of the repeal of the investor protection act known  as Glass-Steagall (Robert Rubin, Alan Greenspan, Larry Summers), a photo of the grand double staircase in the Federal Reserve building, and so forth.

What you will not find is an honest accounting of how the Fed allowed Citigroup to grow into a financial Frankenstein and then quietly and secretly shoveled trillions of dollars into the firm to keep it afloat.

You won’t find any of that because on March 3, 2009, former Fed Chairman Ben Bernanke testified under questioning from Senator Bernie Sanders that “the Federal Reserve lends to healthy firms on a collateralized basis…” In reality, Citigroup was a financial basket-case at that point. Its stock closed that day at $1.22. It would take a court battle launched by Bloomberg News and legislation pushed by Senator Bernie Sanders to unearth from the Fed the fact that it had funneled over $16 trillion in cumulative loans to save the financial system. Citigroup was the largest recipient of those loans, with a take of over $2.5 trillion cumulatively, on top of $45 billion in TARP funds and over $306 billion in asset guarantees.

Bernanke’s account in his new book, The Courage to Act: A Memoir of a Crisis and Its Aftermath, attempts to resuscitate the bogus scenario that it was the collapse of Lehman and AIG that set the crisis in motion, not mega banks weakened by lax regulation by the Fed and the repeal of the Glass-Steagall Act, a decision supported by the Fed. (Lehman Brothers, an investment bank, and AIG, an insurance company, were not overseen by the Federal Reserve at that time.)

Sheila Bair, head of the FDIC during the crisis, has already revealed that Citigroup was far from a healthy institution when the Fed was secretly shoveling $2.5 trillion in cumulative loans into the firm, many at below 1 percent interest rates. Bair wrote in her own book, Bull by the Horns, the following:  . . .

Continue reading.

Written by LeisureGuy

6 October 2015 at 4:10 pm

The Trans-Pacific Partnership: Good? or bad?

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I am leery of the Trans-Pacific Partnership, but Paul Krugman points out that it’s reassuring to see who is against it and why. From his brief blog post (and do click the link to read the whole thing):

What I know so far: pharma is mad because the extension of property rights in biologics is much shorter than it wanted, tobacco is mad because it has been carved out of the dispute settlement deal, and Rs in general are mad because the labor protection stuff is stronger than expected. All of these are good things from my point of view.

However, James Surowiecki in a brief New Yorker column describes some drawbacks:

In 2012, Australia implemented tough anti-tobacco regulations, requiring that all cigarettes be sold in plain, logo-free brown packages dominated by health warnings. Philip Morris Asia filed suit, claiming that this violated its intellectual-property rights and would damage its investments. The company sued Australia in domestic court and lost. But it had another card to play. In 1993, Australia had signed a free-trade agreement with Hong Kong, where Philip Morris Asia is based. That agreement included provisions protecting foreign investors from unfair treatment. So the company sued under that deal, claiming that the new law violated the investor-protection provisions. It asked for the regulations to be discontinued, and for billions in compensation.

The case has yet to be decided, but the concerns it raises help explain President Obama’s embarrassing setback last week, when the House failed to give him fast-track authority over one of two big trade agreements that had been envisaged as a key part of his legacy. Both agreements—the Trans-Pacific Partnership, with eleven Asian and Pacific countries, and an agreement with Europe called the Transatlantic Trade and Investment Partnership—include provisions very like the ones at the heart of Australia’s fight with Big Tobacco. Known as Investor-State Dispute Settlement (or I.S.D.S.) provisions, they typically allow foreign investors to sue governments when they feel they have not received “fair or equitable treatment,” and to have their cases heard not by a domestic court but by an international arbitration tribunal made up of three lawyers.
These provisions have been opposed by an unusual coalition of progressives and conservatives, who contend that they will let multinationals override government policy, and, as Senator Elizabeth Warren put it, “undermine U.S. sovereignty.” On the other side, the Obama Administration and business groups insist that this is just fear-mongering. They point out that I.S.D.S. provisions have been around for fifty years, that lawsuits under them are rare, and that companies typically don’t win them. I.S.D.S., they argue, doesn’t limit the ability of governments to regulate but gives foreign investors some redress if they get treated unfairly. That makes them more likely to invest in countries that don’t have robust legal systems, which fuels economic growth. In the old days, aggrieved American investors would call on the Navy to protect their interests—thus the phrase “gunboat diplomacy.” How much better that now they just call their lawyers.
But these days signing such agreements is risky for countries. I.S.D.S. lawsuits used to be rare, but they’re becoming a growth industry. Nearly a hundred have been filed in the past two years, as against some five hundred in the quarter century before that. Investor protection, previously a sideshow in corporate law, is now a regular part of law-school curricula. “We’ve also seen an expansion in the types of claims that have been brought,” Lise Johnson, the head of investment law and policy at the Columbia Center on Sustainable Investment, told me. I.S.D.S. was originally meant to protect investors against seizure of their assets by foreign governments. Now I.S.D.S. lawsuits go after things like cancelled licenses, unapproved permits, and unwelcome regulations.
This mission creep has been abetted by the fact that the language of I.S.D.S. provisions is often vague. Jason Yackee, a law professor at the University of Wisconsin who specializes in international-investment law, told me, “The rights given to investors are so open-ended and ambiguous that they allow for a lot of creative lawyering.” Canada lost a case where it had rejected, after an environmental study, a proposed mining and marine-terminal project. The country was also sued when Quebec imposed a moratorium on fracking. Germany is in the midst of a $4.7-billion lawsuit occasioned by its decision to phase out nuclear power. Uruguay is facing a lawsuit from Philip Morris International, much like the one brought against Australia.
There’s nothing wrong with domestic courts reviewing government regulations, but outsourcing the responsibility to international tribunals is troubling. . .

Continue reading. He suggests that I.S.D.S. should be dropped altogether.

And John Cassidy, also in the New Yorker, talks about the TPP and the likely impact on world poverty, a column also worth reading. From that column:

With a good deal of justification, critics like Bernie Sanders argue that previous deals, such asNAFTA, favored business interests at the expense of workers and the environment. Many progressives argue that the T.P.P. will be another giveaway. Meanwhile, conservative critics such as Donald Trump, with rather less justification, argue that the United States’ trading partners have outsmarted and out-negotiated us. In fact, the known details of the agreement, which include strong guarantees for intellectual-property rights and some binding resolution procedures for cross-border disputes, appear to reflect pretty closely what corporate America wanted, even if some individual interests, such as tobacco producers, aren’t happy about last-minute concessions that U.S. negotiators made in order to get a deal.
For the sake of American workers threatened by overseas competition, sick people in poor countries who buy American drugs, and many, many others, it is important to get the details right. But the larger context is also worth bearing in mind. With the remarkable rise of China and India, the global economy’s center of gravity has shifted to the east—and there, despite the problems currently facing China and other developing countries, it is is likely to stay. Not for nothing are the White House and other supporters of the T.P.P. busy promoting it as way of defining some rules for a more Asia-centric world, and also—in traditional mercantile fashion—as a means of checking a rising rival power, in this case China.


Written by LeisureGuy

6 October 2015 at 3:28 pm

Women legislators in Ohio introduce bill that provides the same thoughtful oversight of men’s reproductive health as male legislators provide for women

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Meteor Blades writes for Daily Kos:

Ohio state Sen. Nina Turner (D) isn’t happy with bills that seek to control women’s access to contraception and abortion. She has joined a trend across the nation by introducing a bill thatwould require men seeking a prescription for erectile dysfunction drugs to see a sex therapist, receive a cardiac stress test and “get a notarized affidavit signed by a sexual partner affirming impotency.” Sex therapists would be required to present the option of “celibacy as a viable lifestyle choice.”

“The men in our lives, including members of the General Assembly, generously devote time to fundamental female reproductive issues—the least we can do is return the favor,” Senator Turner said. “It is crucial that we take the appropriate steps to shelter vulnerable men from the potential side effects of these drugs.

“When a man makes a crucial decision about his health and his body, he should be fully aware of the alternative options and the lifetime repercussions of that decision,” Senator Turner said today. Men will be more easily guided through the process of obtaining treatment for impotence so they can better understand and more effectively address their condition.

Sen. Turner isn’t the only legislator to introduce a “Viagra bill” or amendments in response to what mostly male legislators have been proposing around the nation.In Illinois, for instance, . . .

Continue reading.

Written by LeisureGuy

6 October 2015 at 11:07 am

Posted in Daily life, Government, Law


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