A patch for Wall Street's bad habits
The Senate is poised to vote this week on amendments to the financial reform bill that will determine whether Wall Street's banks will serve the American economy or whether the American economy will continue to serve Wall Street's banks.
As they prepare to vote, senators might look at the latest report from the Congressional Oversight Panel on the TARP, chaired by Elizabeth Warren. Last week, the panel released a study of how America's banks used TARP funds to provide loans to small businesses. Lending by the biggest banks -- those with assets of more than $100 billion, which received 81 percent of government bailout funds -- declined, while lending to small businesses from medium-size banks, with assets of $10 billion to $100 billion, which received 11.4 percent of the bailout, increased.
Raising the Dead
Moribund Democrats showed surprising signs of life in yesterday's elections.
For a party presumably at death's door, the Democrats had themselves a pretty fair election yesterday, while liberal and labor Democrats had an altogether bang-up time.
The Democrats held John Murtha's southwest Pennsylvania House seat in exactly the kind of white working-class district that is supposed to be trending Republican this year. Voters ousted the exquisitely vulnerable Arlen Specter -- an avowedly careerist incumbent in an anti-incumbent year -- in favor of a far fresher face, Joe Sestak, who also has a better chance than Specter come November.
The danger in financial markets' unchecked 'doomsday machines'
May has been a month of deregulatory debacle, of machines running out of control in the Wall Street meltdown and the Gulf oil spill, both of which could have been averted by some prudent rule-making. Such massive mishaps were prefigured, in a sense, by the Doomsday Machine -- the Soviet device, in the concluding scene of "Dr. Strangelove," that reduces the world to a cinder. Designed to automatically detonate so many atomic bombs if just one nuclear weapon is fired at the U.S.S.R. that it would deter any foe from dropping the big one, it works perfectly, with one small hitch: A U.S. B-52 drops the bomb on Russia before Americans learn of its existence, and mere humans are powerless to intervene as it blows up the planet.
Last week Wall Street stumbled upon its very own Doomsday Machine: computers programmed to go into automatic selling mode when a share price plunges unexpectedly. When the prices of several stocks declined Thursday, the New York Stock Exchange suspended trading in those stocks. But they continued to plunge on multiple other exchanges. Within seconds, stocks everywhere were tanking; within 15 minutes, the Dow Jones industrial average had dropped a thousand points.
Henry Takes Command -- Collaboratively
Having waged a successful underdog campaign, Mary Kay Henry steps up to lead SEIU -- and mend some fences in the process.
When Mary Kay Henry graduated from Michigan State in 1979 with a degree in industrial labor relations, it took her the better part of a year to land a job with a union, chiefly because most unions in those days hired few if any women. During that time, she worked as a clerical employee in a hotel and as a night janitor. She hit bottom, she told me during an interview on Monday, when she took on a second job as a grill cook, and, in her sleep-deprived state, "fell asleep inside a freezer."
All of which, some might argue, was merely suitable preparation for a career inside the Service Employees International Union, a famously demanding employer. Hired as a researcher by SEIU, she built a reputation as a crack organizer who became the union's organizing director and then head of its health-care division during the presidency of Andy Stern. On Saturday, having waged a successful underdog campaign against Secretary Treasurer Anna Burger to succeed Stern, Henry was elected SEIU's new president.
Why America needs -- but probably won't get -- a 2010 version of the Depression-era public jobs programs.
In the autumn of 1933, Harry Hopkins was worried about the coming winter. Since May, he had served in Franklin Roosevelt's administration as head of the federal government's new -- in fact, its first -- program to distribute funds to the unemployed. Neither unemployment insurance nor food stamps nor welfare had yet come into existence. Only a handful of states had relief programs, and they were rapidly going broke. And private charity was almost laughably inadequate to the problems of a nation where unemployment stood close to 25 percent.
Hopkins feared that millions of Americans would be without food or shelter in the coming cold months. In October, he met with the president and proposed something new: a temporary federal jobs program to see the nation through the winter. It would employ 4 million people and last for four months. Roosevelt did a quick calculation, figured it would cost $400 million, and decided to take that money from the budget of the Public Works Administration, run by his secretary of the interior, Harold Ickes.
Deficit hawkery's harsh impact on education
One of the precious few points of consensus in our polarized land is that we need to do a better job educating our kids. But consensus, apparently, gets you only so far. In red states and blue, in urban, suburban and rural districts with unionized and non-unionized teachers, the story is the same: The worst recession since the 1930s is clobbering the nation's schools.
In Indiana and Arizona, the legislatures have eliminated free all-day kindergarten. In Kansas, some school districts have gone to four-day weeks. In New Jersey, 60 percent of school districts are reducing their course offerings. In Albuquerque, the number of school district employees is down 10 percent. In the D.C. suburbs, Maryland's Prince George's and Virginia's Prince William counties have increased their class sizes.