Is student loans the next debt crisis?

Wash Post:

The amount of student loan debt has skyrocketed in recent years to a total of $867 billion last year — or more than the $704 billion in outstanding U.S. credit card debt, according to the Federal Reserve Bank of New York. Of the 37 million borrowers who have outstanding student loan balances as of third-quarter 2011, 14.4 percent have at least one past-due student loan account.

I've often wondered how much money is sucked out of the economy in the form of future student loan payments that would otherwise go towards buying a house, for example. How much do people forgo in future spending that goes towards loan repayment instead? I know I held off on buying my first place for a long time because of my $60,000 in graduate school/law loans - I was paying the equivalent of a month's rent per month on my loans after I graduated - and even once they were paid off I felt like I was starting at zero in terms of saving for my downpayment. And to what degree are we channeling people towards higher paying jobs that they might not want, simply to be able to pay off their debt burden (and skewing their happiness in addition to perhaps steering people away from more creative, or more public service oriented, careers)?

I've just always been curious as to the economic impact, and social impact, of the high cost of education in this country. Read the rest of this post...

Study: Horny fruit flies like to get drunk

Seriously. From the NYT:

To test the relationship between stress and alcohol in fruit flies, researchers at the University of California, San Francisco, allowed one group of male flies to mate freely with available virgin females. Another group of male flies had the opposite experience: the females they mingled with had already mated, and were thus indifferent to any approach.

After four days, the flies in both groups fed in glass tubes outfitted with four straws, two providing a regular diet of yeast and sugar and two containing yeast, sugar and 15 percent alcohol. Fruit flies as a rule will, like many humans, develop a taste for alcohol and, in time, a preference for the 15 percent solution. But the rejected flies drank a lot more on average, supping from the spiked mixture about 70 percent of the time, compared with about 50 percent for their sexually sated peers.

I wonder what the fruit flies would do if you offered them 72 virgins? Read the rest of this post...

Video: Kitten tormented by the Google

Actually, it's not Google's fault, it's that damn cursor.

Seriously though, I do find it calming watching an animal swat at a cursor.

Read the rest of this post...

DNC reportedly resisting adding marriage equality (aka gay marriage) to Dem party platform

This is really a fascinating issue.  Lord knows why, but somehow adding marriage equality (our phrase for letting gay couples get married too) to the Democratic party platform has become "the" hot topic in the gay community this political season. I say "somehow" not to disparage the effort, or the merit of it, but rather to suggest that it's not entirely clear how this issue, rather than, say, adding gays and trans people to an already existing executive order dealing with employment discrimination among federal contractors, rose to the top.  (Though perhaps it's because it's easier to say "marriage" than the latter.)

In any case, a growing number of Democrats are publicly calling for inclusion of a pro marriage equality plank in the Democratic party platform, including at least 22 Democratic Senators, which will only raise expectations in the gay community of such a plank being adopted in the fall.  If it is adopted, that puts the President in a bad spot eight weeks before his election, and if it's not adopted, that will supremely tick off the community, which now has growing expectations, and which now knows that if marriage equality doesn't end up in the platform, it means the Democrats killed it on purpose.  And that won't be a pretty sight - eight weeks before the election.

Either way, the President now has to deal with marriage equality eight weeks before the election because he chose not to "evolve" sooner (or rather, he devolved and now says he's re-evolving without much evolution to show for it (Barack Obama supported gay marriage in 1996, and only changed his mind in the last decade or so - he then told our own Joe Sudbay, in an interview back in October of 2010, over 500 days ago, that he was "evolving" on the issue)).

As I said, it's a fascinating issue, and this time it really has just bubbled up organically.

Joe has been warning for a while now that it was better for the President to come out for marriage sooner rather than later.  And it looks like he was right.  This is the last thing the President needs eight weeks before the election.  He should nip it in the bud now and just come out for marriage equality and be done with it.  The fun of watching twice divorced, thrice married, and multiple adulterer Newt Gingrich defend the sanctity of marriage(s) would be worth the price of admission alone. Read the rest of this post...

Stephanopoulos: Santorum may need an actual act of God to force a brokered convention

From ABC's George Stephanopoulos:

But to do it, Santorum would have to basically sweep all the big states left:

Illinois next week. (And even that win might not get him most of the delegates because Santorum’s off the ballot in a few districts.)

Then he needs upsets in Wisconsin and Maryland on April 3rd – plus a sweep of New York and Pennsylvania at the end of the month.

In May, he’d need to win big on the 8th: Indiana, West Virginia and North Carolina – and hope that gives him enough momentum to win three of the five contests on June 5th. One of those wins would have to be either New Jersey or California.

All that would cripple Romney heading to Tampa. Is it likely? Not really, but not impossible either.

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Obama compares GOP to "flat earth society" for attacks on new energy

This is good.  It's a larger theme the Democrats should be pushing more broadly - namely, that the GOP is anti-science, and anti-facts.  Oh, and they basically lie.

Wash Post:

“Lately, we’ve heard a lot of professional politicians, lot of folks running for certain office, they’ve been talking down new sources of energy,” Obama said. Later he added: “Why would someone who wants to lead the country ignore the facts?”

Read the rest of this post...

Joe Nocera: Jon Corzine may "get away with" committing the worst crime a broker-dealer can commit

Another county heard from. Joe Nocera, one of the best financial reporters in the country, echoes what we wrote just days ago — it looks like Jon Corzine, poster-boy for the Top 0.01%, may never see the inside of a courtroom, much less a jail.

And yet, he and his firm appear to have committed the "sin of sins" (or crime of crimes) for a firm of his type — he took segregated customer money to cover the firm's own losses.

Writing in the New York Times, Nocera says (my emphasis and some reparagraphing):

It’s sure starting to look as if Jon Corzine is going to get away with it.

By now, it has been well established that Corzine’s former firm, MF Global, committed the sin of sins for a broker-dealer. In late October, during the final, desperate days before it entered bankruptcy proceedings, its executives took money from segregated customer accounts — money that belonged not to MF Global but to the farmers and commodities traders that were its clients — and used it to prop up its rapidly collapsing business.

Nor was this petty cash: of the $6.9 billion in customer assets that MF Global held, a stunning $1.6 billion is missing. There is virtually no chance that the full amount will ever be recovered.

Let’s not mince words here. These executives committed a crime.

Virtually every knowing violation of the Commodities Exchange Act is a crime, but taking money from segregated customer accounts is at the top of the list. And for good reason. ... Indeed, customers need to be able to trust the fact that their money is segregated and protected at all times. Otherwise, the markets can’t function.

It's not just a crime; it's the mother of all broker-dealer crimes, and yet prosecutors are not going to prosecute unless they find a "smoking gun" — amazing. In how many courtrooms in this country is there no smoking gun, but plenty of evidence to convict?

I guess it's the old old story: "Circumstantial evidence for thee; smoking guns for me and my friends." Nocera again:

Excuse me while I roll my eyes. Of course there isn’t a smoking gun. As a general rule, financial professionals tend not to write e-mails that say, “Hey, we’re desperate. Let’s break into the customer accounts!” And, of course, they are always going to say it was unintentional. ... [I]s it really plausible that you can take $1.6 billion — nearly 25 percent of the customer assets under management — and not know you’ve used customer money? It is not.

Nocera then makes exactly the Rule of Law argument we've made in these pages again and again. If the connected rich can always skate, it's not just bad for financial markets (and it is really bad), "it isn’t good for democracy either."

I’ve heard it suggested, for instance, that the Justice Department won’t prosecute Corzine because it would hurt President Obama. (Corzine, the former governor of New Jersey, had been a big fund-raiser for the president.)

He doesn't believe that suggestion, but he understands why others might differ.

Indeed. This is me, begging to differ.

GP

(To follow on Twitter or to send links: @Gaius_Publius)
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If GOP super-lawyer Paul Clement isn’t such a bad guy, why does he keep defending bad guys?

GOP super lawyer Paul Clement needs a hug.

Everyone is being mean to him.  And he's not a bad guy, really.  Sure he's making millions defending the anti-gay DOMA law, the anti-Latino Arizona immigration law, and the anti-black South Carolina voter ID law.  By why define a lawyer by the cases he picks, Clement argues.  The law is about all sides getting a robust defense in court, he says.

Then why is it that Paul Clement keeps choosing to defend the bad guys?

Today we learn that Clement will be arguing the constitutionality of health care reform before the Supreme Court.  Guess which side he's taking.

It would be interesting to ask Attorney General Eric Holder, the White House, and Supreme Court Justice Elena Kagan - all of whom rose to Clement's defense when he was criticized for taking the DOMA case - why their upstanding friend keeps choosing cases that hurt people. Read the rest of this post...

Blowback in the GOP war on teleprompters

John Chait makes a good point:

And speaking of a failure to communicate, the Republican war on TelePrompTers has poetically backfired. It began as a quasi-racist meme among the fever swamps of the right, a way for right-wingers to express their belief that Obama is a brainless talking doll. By catering to it, Republicans backed themselves into a position where they can’t use TelePrompTers at all. The result is a series of rambling election night speeches that manage to be at once frightening and dull. The speeches, like the race, just go on and on and on.

While I agree with Kevin Drum's response that the Republican candidate's speeches suck because the candidates themselves are sucky, Chait is also right that the candidates are worse than they need to be.

As John showed in his earlier post, with pictures, every modern US President has used a teleprompter for speeches. When the words used by the President can mean the difference between war and peace, the idea of a President giving extemporaneous remarks makes them nervous as heck.


Even the GOP base knows this and so Santorum is probably not helping himself when he attacks Romney for using a teleprompter. What has the GOP base riled up is not the use of the teleprompter but the fact that Obama is easily the best orator to be elected President since JFK. Clinton and Reagan were equally effective communicators but their forte was conversational rather than inspirational.

Whenever the reactionary mind sees a fact it doesn't like, it finds an excuse to ignore it.

Read the rest of this post...

Taibbi: Bank of America is "too crooked to fail"

This really is a must-read, and it really speaks for itself. The subject is Bank of America, and it stands proxy for the entire U.S. banking system.

Kudos to Rolling Stone for actually turning a good researcher (Taibbi) loose on this stuff — and for publishing it during election season. A sitting president is a very persuasive man when his job is up for renewal (just ask MSNBC, Dylan Ratigan excepted).

The link is here. In the subtitle, Taibbi asks:

The bank has defrauded everyone from investors and insurers to homeowners and the unemployed. So why does the government keep bailing it out?

That covers it, right?

A taste (my emphasis and reparagraphing):

At least Bank of America got its name right. The ultimate Too Big to Fail bank really is America, a hypergluttonous ward of the state whose limitless fraud and criminal conspiracies we'll all be paying for until the end of time.

Did you hear about the plot to rig global interest rates? The $137 million fine for bilking needy schools and cities? The ingenious plan to suck multiple fees out of the unemployment checks of jobless workers?

Take your eyes off them for 10 seconds and guaranteed, they'll be into some sh*t again: This bank is like the world's worst-behaved teenager, taking your car and running over kittens and fire hydrants on the way to Vegas for the weekend, maxing out your credit cards in the three days you spend at your aunt's funeral. They're out of control, yet they'll never do time or go out of business, because the government remains creepily committed to their survival, like overindulgent parents who refuse to believe their 40-year-old live-at-home son could possibly be responsible for those dead hookers in the backyard.

That was my asterisk; no kittens or hookers were harmed in the pasting of this quote. (That was one paragraph of the source, by the way; I get two more.)

How about this:

It's been four years since the government, in the name of preventing a depression, saved this megabank from ruin by pumping $45 billion of taxpayer money into its arm. Since then, the Obama administration has looked the other way as the bank committed an astonishing variety of crimes – some elaborate and brilliant in their conception, some so crude that they'd be beneath your average street thug.

Bank of America has systematically ripped off almost everyone with whom it has a significant business relationship, cheating investors, insurers, depositors, homeowners, shareholders, pensioners and taxpayers. It brought tens of thousands of Americans to foreclosure court using bogus, "robo-signed" evidence – a type of mass perjury that it helped pioneer.

It hawked worthless mortgages to dozens of unions and state pension funds, draining them of hundreds of millions in value. And when it wasn't ripping off workers and pensioners, it was helping to push insurance giants like AMBAC into bankruptcy by fraudulently inducing them to spend hundreds of millions insuring those same worthless mortgages.

And:

But despite being the very definition of an unaccountable corporate villain, Bank of America is now bigger and more dangerous than ever. It controls more than 12 percent of America's bank deposits (skirting a federal law designed to prohibit any firm from controlling more than 10 percent), as well as 17 percent of all American home mortgages.

By looking the other way and rewarding the bank's bad behavior with a massive government bailout, we actually allowed a huge financial company to not just grow so big that its collapse would imperil the whole economy, but to get away with any and all crimes it might commit. Too Big to Fail is one thing; it's also far too corrupt to survive.

Hooked yet? I am. That's my three-paragraph allotment — can't wait to read the rest. This piece is loaded, and there's a ton of history of the bank. Taibbi really does his job.

But what about the political side, the Obama bottom line?

If I were to ask the author, "Why is this happening?" he might reply (in the words of the article) because "our current president, like the last one, apparently believes it's better to project a false image of financial soundness than to allow one of our oligarchic banks to collapse under the weight of its own corruption."

Mr. Taibbi labels Bank of America, in its current form, a "full-blown assault on the American dream."

I'll go him one better. It's a full-blown assault on the American political system, the American Constitution. After all, the Constitution isn't just what's on paper; it's amended by what's practiced, especially by bipartisan agreement.

Bush and Obama have amended our current Constitution. Rule of Law for the New Nobility (Our Betters) has been suspended. That's just a fact. Whatever other reasons you may harbor for voting Dem in the presidential ad campaign, this isn't one of them.

Restoring Rule of Law would be revolutionary — I mean that literally — and may take a form that looks like rebellion. If so, that's terrible news. It's sad to think that it took the Great Depression to allow FDR to sell his revolution to the Betters of his day, as an alternative to actual rebellion by the destitute and hopeless.

Do we really need a depression to get a different, better Obama (the one his voters Hoped for) to do likewise? If so, this is a really sh*tty corner we've painted ourselves into.

(Yep, second asterisk. Maybe if Matt quotes this, he will restore my original intention, and reverse my edit of his good swearing as well.)

GP

(To follow on Twitter or to send links: @Gaius_Publius)
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Santorum tells Puerto Rico to speak English

Santorum doubles down on bigotry again:

"We need to work together and determine what type of relationship we want to develop," he told the newspaper.

But Santorum said he did not support a state in which English was not the primary language.

"Like any other state, there has to be compliance with this and any other federal law," Santorum said. "And that is that English has to be the principal language. There are other states with more than one language such as Hawaii but to be a state of the United States, English has to be the principal language."

Jason Links does a good job of pointing out ignorance and incoherency of this outburst (including the fact that there is no law that says you must speak English in order to be admitted as a state) but Santorum is not likely to be the 2012 nominee (2016 is a different matter). Santorum does have the ability to raise campaign topics that the Romney camp would surely wish to keep as silent as possible on. Statehood for Puerto Rico is one of those issues.

Residents of Puerto Rico don't get to vote in the presidential election but Puerto Ricans living on the US mainland do, and the Puerto Rican community in Florida is possibly large enough to tip the election. And even though the issue of Statehood is contentious amongst those living on the island, Puerto Ricans living on the mainland tend to be overwhelmingly in favor of it. Which would of course make supporting Puerto Rican statehood a no-brainer for a candidate, if only the GOP had not spent the past four years fulminating against 'illegals' which their audience (and Latinos) understood was a codeword for 'Latinos'.

NOTE FROM JOHN: I do wish the Republicans would stop using the English language as code for bashing Latinos and other immigrants.  There is a valid argument to be made for every American citizen learning English, without always having to resort to the hysteria and bigotry that pervades the GOP.

Our language unites us as Americans, whether it's written in law or not.  And I'm someone who speaks five languages (including Spanish), so I'm sympathetic to immigrants and to other languages, not to mention the fact that my mom is, and all of my grandparents were, immigrants.  But they threw my mom in first grade, right off the boat from Greece, even though she was old enough to be a third grader, and forced her to learn English.  And she did.  And was double promoted and graduated high school with kids her own age.  So I'm sympathetic to immigrants, can't stand when Republicans use the language issue to cloak their own prejudice, but I also believe that we should all speak a common tongue.  It's too bad the Republicans have pretty much guaranteed that there's no way to have a civil discussion on the topic, since civility was never their intent in the first place. Read the rest of this post...

Assad's emails leaked

The Guardian reports that they have obtained copies of Assad's private email:

Bashar al-Assad took advice from Iran on how to handle the uprising against his rule, according to a cache of what appear to be several thousand emails received and sent by the Syrian leader and his wife.

The Syrian leader was also briefed in detail about the presence of western journalists in the Baba Amr district of Homs and urged to "tighten the security grip" on the opposition-held city in November.

The revelations are contained in more than 3,000 documents that activists say are emails downloaded from private accounts belonging to Assad and his wife Asma.

As is usually the case in these situations the initial disclosures mostly confirm what we already knew but besides the thuggery and the bragging there is the banality of the wife's demands for crystal chandeliers and fondue sets in the midst of a civil war.

We have no way to know whether the emails are genuine or fake but many of the major intelligence services monitoring Syria will have a pretty good idea. It takes a lot of information to produce a forgery that would withstand cross checking with the volumes of information they have on file [1].

The opinion of the emails that is likely to matter is that formed by Russia's GRU. According to the US establishment media Russia is the principal force blocking UN action against Syria. Which is the truth but not necessarily the whole truth. A cynic might suggest that with the Libyan civil war just finished and the war in Afghanistan continuing, the Obama administration would prefer to have its hands being tied by the Russians than charge into what could be a messy situation in an election year. Should Russia decide to change that position, the emails would provide a convenient pretext.

[1] Dissatisfied by the opinion of the CIA analysts who dismissed evidence of Iraqi WMD as clearly spurious, the Bush administration had to create a new intelligence unit (Feith's Office of Special Plans) to pronounce the evidence compelling. Unlike Feith, the CIA analysts could spot that it was rather unlikely that Iraqi plans for nuclear technology would use Farsi, the language of Iran. Read the rest of this post...