"New York Federal Reserve Estimates 3.6 Million Foreclosures Will Occur In The Next Two Years"

Pat Garofalo at Think Progress:

While foreclosure rates hit a four-year low in 2011, the early signs for 2012 don’t look good when it comes to housing, as banks have begun to work through a backlog of foreclosures that were delayed by the foreclosure fraud scandal. In fact, the New York Federal Reserve anticipates that 3.6 million foreclosures will occur in the next two years, piling on to the 1 million in 2010 and the 800,000 last year. “The ongoing weakness in housing has made it more difficult to achieve a vigorous economic recovery,” said New York Fed President William Dudley. “Housing has inhibited economic activity through a number of channels.” (HT: Realty Biz News)

Willard's wild tax scheme (for starters, he doubles the Bush tax cuts for millionaires)

The Romney tax plan in five charts, courtesy of Center for American Progress' Michael Lind:

"A smart guy who is also a moral coward"

Guess who?  

Paul Krugman on Willard:

I was fairly startled by Mitt Romney’s new defense of his work at Bain: it was just like the auto bailout!

“In the general election, I’ll be pointing out that the president took the reins of General Motors and Chrysler, closed factories, closed dealerships, laid off thousands and thousands of workers. He did it to try to save the business,” Romney said on “CBS This Morning.” “We … had, on occasion, to do things that are tough to try to save a business.”

The first thought is, didn’t Romney write an op-ed titled Let Detroit Go Bankrupt? Yes, he did. But the title was misleading. What he actually called for was a “managed bankruptcy”, with government support — not too different from what actually happened.

So can Romney claim that he was for this successful policy all along? No, he can’t — because when the actual policy was proposed, he trashed it:

What is proposed is even worse than bankruptcy–it would make GM the living dead.

So what the story of Romney and the auto bailout actually shows is something we already knew from health care: he’s a smart guy who is also a moral coward. His original proposal for the auto industry, like his health reform, bore considerable resemblance to what Obama actually did. But when the deed took place, Romney — rather than having the courage to say that the president was actually doing something reasonable — joined the rest of his party in whining and denouncing the plan.

And now he wants to claim credit for the very policy he trashed when it hung in the balance.

More on Income Inequality

Key excerpts from the top White House economic adviser's presentation on the "mindboggling" magnitude and increasingly negative consequences of growing income inequality (via Ezra Klein):

Klein - This morning, Alan Krueger, the chairman of the President’s Council of Economic Advisers, gave a speech on inequality at the Center for American Progress. Prepared remarks here. Charts here. These are the parts that caught my eye:
 
- “I used to have an aversion to using the term inequality. The Wall Street Journal ran an article in the mid-1990s that noted that I prefer to use the term ‘dispersion’. But the rise in income dispersion – along so many dimensions – has gotten to be so high, that I now think that inequality is a more appropriate term.”

- “As the Congressional Budget Office noted in a recent report, the top 1 percent of families saw a 278 percent increase in their real after-tax income from 1979 to 2007, while the middle 60 percent had an increase of less than 40 percent.”


(Alan Krueger) 
 
- “We were growing together for the first three decades after World War II, but for the last three decades we have been growing apart. Here at CAP, I should point out that the pattern in the post-1970s period is not monolithic. . .the period from 1992 to 2000 was an exception, when strong economic growth and the policies of the Clinton administration led all quintiles to grow together again. Indeed, all income groups experienced their fastest income growth in years. I could also note, parenthetically, that there is no sign in these data that the tax increases in the early 1990s had an adverse effect on income growth.”

- “The magnitude of these shifts is mindboggling. The share of all income accruing to the top 1 percent increased by 13.5 percentage points from 1979 to 2007. This is the equivalent of shifting $1.1 trillion of annual income to the top 1 percent of families. Put another way, the increase in the share of income going to the top 1 percent over this period exceeds the total amount of income that the entire bottom 40 percent of households receives.”

Mitt Romney's Crazy Talk III

Jared Bernstein has it:

Everyone's got a right to their own opinions…but not to their own facts.

When Republican presidential candidate Mitt Romney asserted that federal low-income programs are administered so inefficiently that “very little of the money that’s actually needed by those that really need help, those that can’t care for themselves, actually reaches them,” my colleagues at the CBPP got to work on this graph.

It shows that “federal administrative costs range from less than 1 percent to 8 percent of total federal program spending.  Combined federal and state administrative costs range from 1 percent to 10 percent of total federal- and state-funded program spending.”

Gov Romney is singing from the same playbook as Rep Paul Ryan along with a litany of conservatives whose goal for years has been for the Federal gov’t to shed the responsibility for Medicaid, food stamps (SNAP), low-income housing, and so on.  Once you “block grant” these functions to the states, it’s easier to cut them.  And remember, this is from a candidate (and the same is true for the House R’s budget) that wants to cut taxes deeply for the richest households.

So he’s launching his attack based on inefficient administration—the claim that most of the dollars don’t reach the clients.  Trouble is, the facts got in the way.

Many people argue that Gov Romney is the reasonable R candidate…you might not love his policies, they tell me, but he’s not known for making stuff up, for repeating outrageous statements with no basis in fact.

OK, let’s see—if he keeps repeating this falsehood, then they’re wrong.

The Man from Bain

The expose of Willard Mitt Romney's role as a job-killer with Bain Capital, currently being circulated - in the most ironic electoral gambit in my memory - by a pro-Gingrich "SuperPAC," funded to the tune of $5 million by a right-wing casino magnate and friend of Newt's.  

Who knew?

Gallup:  "The health of the economy in general (31%) and jobs or unemployment (26%) continue to rank as the top two specific issues Americans most often cite.."  Deficits?  Not so much.

"The Foreclosure Crisis: A Government in Denial"

Bruce Judson at New Deal 2.0:

The financial crisis began with the housing crisis and it will not end until we resolve housing. Government policymakers who seemingly ignore this basic fact are leading the nation to another potential catastrophe.

This past week, a number of important events occurred in Washington, including important recess appointments by President Obama. However, the most noteworthy event did not make front page news: the Federal Reserve’s (apparently) unsolicited memo to the committees of Congress that oversee financial services warning of the dangers the current housing market poses for the economy.

This represents an extraordinary action and underscores both the seriousness of the continuing crisis and the absence of meaningful discussion of the problem in Washington. Bernanke’s memo reviewed federal actions to date and effectively concluded that they were unlikely to solve this national tragedy.

The memo concluded, in part:

The challenges faced by the U.S. housing market today reflect, in part…a persistent excess supply of homes on the market; and losses arising from an often costly and inefficient foreclosure process (and from problems in the current servicing model more generally)… Absent any policies to help bridge this gap, the adjustment process will take longer…pushing house prices lower and thereby prolonging the downward pressure on the wealth of current homeowners and the resultant drag on the economy at large.

This memo is notable for several reasons. First, it’s important to remember that when the Fed speaks, it does so in sober, limited terms. So an unprompted Fed warning suggesting “a persistent excess of supply” and a “resultant drag on the economy” is comparable to the Secretary of Homeland Security holding a press conference to warn of the risk of an imminent national emergency. Second, an unprompted memo from Bernanke to the House means that he is so deeply worried he felt the need to speak out in as strong a voice as his position permits. Third, the Fed rarely speaks on issues unrelated to its direct activities. Indeed, The Wall Street Journal subsequently wrote, “For an institution that jealously guards its independence, the Federal Reserve is wading into treacherous political waters.”

Mitt Romney's Crazy Talk II

Anyone who believes Willard Mitt Romney is a moderate, thoughtful alternative to the cranks and crazies who populate the contemporary GOP - to, say, a Michelle Bachmann who will say anything, no matter how evidence-free or insanely hyperbolic - need go no farther than the following quote from Romney's current stump speech:

“President Obama believes that government should create equal outcomes. In an entitlement society, everyone receives the same or similar rewards, regardless of education, effort and willingness to take risk. That which is earned by some is redistributed to the others. And the only people who truly enjoy any real rewards are those who do the redistributing — the government.”

Romney, in his desperation to get the top government job, has shape-shifted himself into an extremist as nutty and hysterical as the rest of them. He is explicitly claiming that President Obama is some sort of socialist who doesn't value education, entrepreneurial risk or work. This is an assertion, frankly, so far removed from the reality of President Obama's actual policies, his rhetoric and his values it doesn't deserve detailed refutation.

Anyone who believes this or asserts this absurdity demagogically isn't fit to teach a junior high school history or civics class, much less aspire to the highest office in the land. Romney brings shame on himself and his party, as much as the fringe characters like Donald Trump, Sarah Palin or Michelle Bachmann have with their "crazy talk."


(Paul Krugman also references this Romney nonsense in an excellent column today.)

"How Austerity Is Killing Europe

Jeff Madrick at NYRB:

"The European Union has become a vicious circle of burgeoning debt leading to radical austerity measures, which in turn further weaken economic conditions and result in calls for still more damaging cuts in government spending and higher taxes. The European debt crisis began with Greece, and that nation remains the European Union’s most stricken economy. But it has spread inexorably to Ireland, Portugal, Italy, and Spain, and even threatens France and possibly the UK. It need not have done so. Rarely do we get so stark an example of bad—arguably even perverse—economic thinking in action." 

Read the rest of Madrick's excellent piece on the fallacy of austerity economics HERE.

The awful truth - government employment has declined more under President Obama than under Reagan

Fact Free!

While Romney and his fellow Government-Job-seekers in the GOP primaries sling crackpot rhetoric about President Obama overseeing some huge growth in the public sector, the facts show an (unfortunate) shrinking of employment in government over the past three years. Floyd Norris at The New York Times has it:

When Barack Obama ran for president four years ago, he appalled some Democrats by saying Ronald Reagan had been a transformational president.

Three years into his presidency, he has exceeded Reagan in one area: reductions in government jobs.

Romney's dishonesty

Paul Krugman takes a look at Willard Mitt Romney's "job killer" vs. "job creator" rhetoric, HERE.

Like most of the Romney double-talk, it doesn't add up.

More on social mobility in the United States as compared to Europe

  Jason DeParle at the New York Times:

At least five large studies in recent years have found the United States to be less mobile than comparable nations. A project led by Markus Jantti, an economist at a Swedish university, found that 42 percent of American men raised in the bottom fifth of incomes stay there as adults. That shows a level of persistent disadvantage much higher than in Denmark (25 percent) and Britain (30 percent) — a country famous for its class constraints.

Meanwhile, just 8 percent of American men at the bottom rose to the top fifth. That compares with 12 percent of the British and 14 percent of the Danes.

Despite frequent references to the United States as a classless society, about 62 percent of Americans (male and female) raised in the top fifth of incomes stay in the top two-fifths, according to research by the Economic Mobility Project of the Pew Charitable Trusts. Similarly, 65 percent born in the bottom fifth stay in the bottom two-fifths.

By emphasizing the influence of family background, the studies not only challenge American identity but speak to the debate about inequality. While liberals often complain that the United States has unusually large income gaps, many conservatives have argued that the system is fair because mobility is especially high, too: everyone can climb the ladder. Now the evidence suggests that America is not only less equal, but also less mobile.

"Bring Back Boring Banks"

Amir Bihde, a professor at Tuft's Fletcher School of Law and Diplomacy, argues for "Boring Banks", HERE.

Mitt Romney's crazy talk

"The guy who fired you."

Mitt Romney and the rest of the GOP pack routinely attack Obama's "socialism." Calling President Obama a "socialist" is crazy talk, but it's just as crazy to suggest that the European countries that have enacted a social democratic - though hardly "socialist" - framework for their dynamic, advanced capitalist economies to function efficiently aren't doing a better job of rewarding merit and hard work than ours is. One central reason our economy is increasingly dysfunctional is because characters like Willard "Mitt" Romney, representing a financial elite who feel  "entitled" to power, have had their way. 

Harold Myerson at the Washington Post has it:

“Over the past three years, Barack Obama has been replacing our merit-based society with an Entitlement Society,” Mitt Romney wrote in USA Today last month. The coming election, Romney told Wall Street Journal editors last month, will be “a very simple choice” between Obama’s “European social democratic” vision and “a merit-based opportunity society — an American-style society — where people earn their rewards based on their education, their work, their willingness to take risks and their dreams.”

Romney’s assertions are the centerpiece of his, and his party’s, critique not just of Obama but of American liberalism generally. But they fail to explain how and why the American economy has declined the past few decades — in good part because they betray no awareness that Europe’s social democracies now fit the description of “merit-based opportunity societies” much more than ours does.

Ronald Reagan would be a pariah in the current version of the GOP

Eric Cantor was on 60 Minutes last night and it didn't go well, when he was challenged by interviewer Leslie Stahl on his notion of "compromise."  Steve Benen at Political Animal has it:

Oldies But Goodies: Da Doo Ron Ron

Stahl: But you know, your idol, as I’ve read anyway, was Ronald Reagan. And he compromised.

Cantor: He never compromised his principles.

Stahl: Well, he raised taxes and it was one of his principles not to raise taxes.

Cantor: Well, he — he also cut taxes.

Stahl: But he did compromise —

Cantor: Well I —

At that point, Cantor’s press secretary, off camera, interrupted the interview, yelling that Stahl was lying when she said Reagan raised taxes. As Stahl told “60 Minutes” viewers, “There seemed to be some difficulty accepting the fact that even though Ronald Reagan cut taxes, he also pushed through several tax increases, including one in 1982 during a recession.”

"Nobody Understands Debt"

Well, not "nobody."  But most of the people talking the loudest about government debt and deficits don't have a clue - they are steeped in ill-informed ideology that doesn't match empirical evidence. (Or perhaps they are invested in the public not having a clue because of a self-interested anti-government agenda.)

Paul Krugman offers a New York Times column that is a useful primer on the real and imaginary issues related to federal budget deficits:

In 2011, as in 2010, America was in a technical recovery but continued to suffer from disastrously high unemployment. And through most of 2011, as in 2010, almost all the conversation in Washington was about something else: the allegedly urgent issue of reducing the budget deficit.

This misplaced focus said a lot about our political culture, in particular about how disconnected Congress is from the suffering of ordinary Americans. But it also revealed something else: when people in D.C. talk about deficits and debt, by and large they have no idea what they’re talking about — and the people who talk the most understand the least.

Perhaps most obviously, the economic “experts” on whom much of Congress relies have been repeatedly, utterly wrong about the short-run effects of budget deficits. People who get their economic analysis from the likes of the Heritage Foundation have been waiting ever since President Obama took office for budget deficits to send interest rates soaring. Any day now!

And while they’ve been waiting, those rates have dropped to historical lows. You might think that this would make politicians question their choice of experts — that is, you might think that if you didn’t know anything about our postmodern, fact-free politics.

Medicare is the most cost-effective health insurance program available in the US, period. No - make that an exclamation mark!

Economist Laura D'Andrea Tyson, debunking the unholy alliance of Blue Dog Democratic Senator Ron Wyden and Randian Nihilist Congressman Paul Ryan in their nonsensical proposal to overturn the Medicare system as somehow "saving money" by shifting beneficaries into private markets, explains the cost-effectiveness of Medicare compared to the "competitive" markets of private insurance:

Despite competition and choice in the private insurance system, Medicare spending has grown more slowly than private insurance premiums for comparable coverage for more than 30 years.

From 1970 to 2009, Medicare spending per beneficiary grew by an average of 1 percentage point less each year than comparable private insurance premiums. Between 2000 and 2009, Medicare’s cost advantage was even larger – its spending per beneficiary grew at an average annual rate of 5.1 percent while per-capita premiums for private health insurance plans grew at 7.2 percent, according to the Center on Budget and Policy Priorities.

In inflation-adjusted terms, Medicare spending per beneficiary increased more than 400 percent between 1969 and 2009 while private insurance premiums increased by more than 700 percent.

What explains Medicare’s sustained cost advantage over private insurance? Medicare has much lower administrative costs than private insurance (administrative costs account for about 14 percent of health care spending, or a whopping $360 billion a year).

And Medicare has considerable negotiating leverage with providers as a result of its huge enrollment. Private insurance plans are unable to negotiate payment rates with providers that are as low as Medicare’s rates, even though Medicare’s negotiating authority is tightly limited and often undermined by Congress.

As anyone with a grain of common sense or empirical data understands, the problems within the Medicare system are not related to Medicare's model of social insurance but in the overall inflationary spirals of our unrestrained,  for-profit health care system.  Compared to other advanced economies with high-quality health care - and universal coverage -  the US medical industry is exorbitantly expensive, but with outcomes that are, overall, worse in terms of life expectancy, infant mortality and other key indicators.

"Best Chart of 2011" - Whose Deficits?

Ezra Klein declared this graph, which originated with the New York Times - showing the relative contributions of Presidents BushJr and Obama to the national debt - the best of 2011.  I think he's right, given the nonsense, deliberate disinformation and outright hysteria that's being promoted by the GOP about deficits and the "Euro-socialist" Obama:

Klein: "What’s also important, but not evident, on this chart is that Obama’s major expenses were temporary — the stimulus is over now — while Bush’s were, effectively, recurring. The Bush tax cuts didn’t just lower revenue for 10 years. It’s clear now that they lowered it indefinitely, which means this chart is understating their true cost. Similarly, the Medicare drug benefit is costing money on perpetuity, not just for two or three years. And Boehner, Ryan and others voted for these laws and, in some cases, helped to craft and pass them."

Best Tax Graphs of 2011

Courtesy of Jared Bernstein and The Center on Budget and Policy Priorities: