From the outset there was reason to believe that, as head of the Securities and Exchange Commission, Mary Jo White would not be an effective regulator. Lo and behold that’s how things are playing out. Ms. White has pissed off Sen. Warren. Sen. Warren sent her a letter the other day expressing her displeasure.
- I love Elizabeth Warren.
- In the segment above she reminds me of Lewis Black. Watch her hands. Like Black, those are the gestures of someone who’s genuinely angry. She’s not just angry though. She’s on a mission. (Re her mission, see Item #1.)
From boston.com (emphasis mine):
U.S. Sen. Elizabeth Warren said Saturday she is shocked that the federal government is earning an estimated $66 billion in profits from student loans originated between 2007 and 2012.
The Democrat from Massachusetts was reacting to a Government Accountability Office report Friday. A previous Congressional Budget Office report estimated that the government will pocket an additional $185 billion in profits on new student loans made over the next 10 years.
‘‘This is obscene. The government should not be making $66 billion in profits off the backs of our students,’’ Warren said in a statement. ‘‘This report reinforces what we already knew — instead of investing in our children and their futures, the government is squeezing profits out of our young people and adding to the mountain of debt they will spend their lives struggling to repay.’’
Warren and eight other U.S. senators committed to wring government profits out of student loans and address a $1.2 trillion in outstanding student loan debt they say is crushing families and putting a strain on the economy.
‘‘We cannot bury our heads in the sand and pretend the profits don’t exist, or use accounting tricks to make them disappear,’’ Warren said. ‘‘It’s time to end the practice of profiting from young people who are trying to get an education and refinance existing loans.’’
Yes, the government is running a significant deficit and should be looking for additional revenue sources but treating student loans as a profit center is just gross.
UPDATE: Continue reading
Matt Taibbi, Justice Department’s New Get-Tough Policy Is, Well, Not:
I don’t want to sound like a broken record, but . . . the latest ploy by the government to insist it is “getting tough” on Wall Street is beyond laughable…
The [recent NY Times] article worried desperately over the issue of whether or not the Japanese subsidiaries [of UBS] would keep their licenses after these guilty pleas. [Note: UBS itself got off scott-free in a non-prosecution settlement.] As is often the case – I’ve personally heard this excuse about a dozen times coming from DC types – regulators are terrified of repeating an Arthur Andersen situation, i.e. punishing a company and seeing massive job losses as a result…
The Arthur Andersen case [,i.e., their 2002 conviction which put them out of business and resulted in 28,000 people being laid off,] has become like Wall Street’s magic mantra – you hear the name whispered anytime any company gets in trouble. This is a tactic straight out of Blazing Saddles, with banks essentially taking themselves hostage, putting guns to their own heads as they creep sideways out the door: “Back off! Prosecute us and all these jobs will die!”
Economics (Sorry, no good news this week.)
- Paul Krugman, The Twinkie Manifesto. (The US was prosperous and inequality was less pronounced when the highest marginal tax rate was much, much higher and more unions were around to help workers secure better wages and benefits.)
- “…in a sharp reversal of historical trends, there is now less equality of opportunity in the United States than in most other wealthy democratic nations.” (Another plug for Kenworthy’s article in Foreign Affairs.)
- Fiscal austerity in a recession is bad policy – really, really bad policy – 2nd ed. (“The U.S. recovery has been remarkable on a comparative basis precisely for one reason: Because despite all of the rhetoric, the U.S. has completely avoided the austerity madness that’s gripped much of the world.”)
- The underlying growth rate of the US economy has slowed significantly
- Dean Baker argues that underwater mortgages do not explain the weak recovery
- @#$% The Grand Bargain and John Boehner too
- How we should approach the Fiscal Cliff
- Robert Reich’s suggestions for Grand Bargain/Fiscal Cliff negotiations: Aim high, Have a trigger mechanism, Taxes
Politics Continue reading
- This captures my (continued) concern with Pres. Obama
- I think it’s essentially what Drew Westen called out in August 2011
- Remember Gov. Romney’s response to the 2006 MA floods? Given what it was, I’m even more relieved he’s not our President-elect
- Charlie Pierce’s reasons for voting for Pres. Obama pretty much mirror my own
- Invest in science!
- Former MA Lt.Gov. and Acting Gov. Jane Swift to the GOP, Wake up!
- MIT economist Simon Johnson with a strong endorsement
- She induces a little heartburn on Wall Street
- Charlie Pierce with a strong endorsement
- No Proof That Tax Cuts for the Wealthy Lead to Economic Growth
- MIT economist Simon Johnson on the Brown-Kaufman Amendment. If passed, it would be a big step in the right direction towards reducing the risk posed by ‘too big to fail’ banks. Unfortunately, it faces bipartisan opposition
- Media criticism from Kevin Baker at Harper’s
- CA Proposition 37, which would have required labeling of foods containing GMOs, was defeated last Tuesday