April 2012 Archives

TIME
By: Martha C. White
April 27, 2012

Big banks elbow in on check cashing, payday lending, and other fringe financial businesses

Conventional wisdom has been that low-income people are better served by mainstream financial institutions than by check cashing storefronts, payday lenders and other providers of fringe financial products. But now, that wisdom is getting turned on its head as fee-starved banks start peddling these expensive "subprime" products to their poorest customers directly.

TIME
By: Dan Kadlec
April 30, 2012

How an ad will persuade you to talk to your kids about money

Coming soon to a magazine, newspaper or Web page near you: emotionally charged public-service messages designed to jolt parents into having "the talk" with their kids. Not that talk. The tougher one about how to budget, save and otherwise manage money.

Kindergarten loan

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The Washington Post
By: Michelle Singletary
April 26, 2012


Kindergarten loan

I'm a parent, and so I get that many other parents want the best for their children. I understand that when it comes time for college, if parents don't have the savings, they take out loans to pay for their children's higher education.

But what about those parents who are also bent on getting their children into the best preschools and who, if they can't afford the tuition, just borrow the money?

CNN
By: Jose Pagilery
April 30, 2012

End of FDIC program may hurt small firm lending

NEW YORK (CNNMoney) -- Small business lending could take a major hit if a federal program that insures small business accounts ends later this year.

Daily Finance
By: Bruce Watson
April 27, 2012

How cuts to state taxes could hit voters in the wallet

Nobody likes to give money to the government, and with bank accounts across the country still smarting from tax season, it seems like a great time to take aim at the tax structure. At least, that appears to be the case in several states that are currently weighing plans to phase out state income tax.

USA Today
By: Bob Annibale and Andrea Levere
April 2012

Learning to save, saving to learn

A child with a savings account is six times more likely to attend college. Over the course of a lifetime, people with college degrees earn 75 percent more than those with just high-school diplomas - nearly a half-million dollars more in total. Yet for many families, achieving that degree means confronting overwhelming financial obstacles.

NBC
By: Christina Cheddar Berk
April 26,2012

Wal-Mart offer cash option for online purchases

For consumers who want to shop online, but either don't have access to a credit card or don't want to use one online due to security concerns, Wal-Mart has a new option.

Wal-Mart will offer its online shoppers a "pay with cash" option. Shoppers select their items at Walmart.com and then select the cash option at checkout. Then, the customer must bring an email receipt with their order number to a Wal-Mart store within 48 hours and pay with cash. After payment is received, the customer can either receive their items shipped to the store or to their preferred address.

Amarillo Globe
By: Jacob Mayer
April 19, 2012

Amarillo Area Foundation seeks funding for financial programs

The Amarillo Area Foundation could receive a $15,000 grant from a statewide initiative to help low-income people become financially stable, but it must raise $50,000 before Dec. 31 to get that grant.

The Atlantic
By: Conor Friedersdorf
April 26, 2012

Pandering to a privileged class: the student loan rate debate

Every month for roughly 10 years I've sent hundreds of dollars from my bank account to lenders who helped finance my undergraduate and graduate degrees from Pomona College and NYU. It was a burden when I was taking home less than $30,000 per year at my first full-time job. Several years back, when a publication I worked at went out of business, payments became a lot more stressful for awhile. As I prepare to get married, I can't say I wouldn't rather divert more of my journalist's salary from Sallie Mae interest to a down payment fund, or my 401(k), or any number of things I'll get less of every month for the years of repayment awaiting me.

The Huffington Post
By: John H. Jackson
April 25, 2012

A new take on 'No Excuses'--tackling poverty to provide meaningful opportunity

We all know that factors related to poverty can limit learning in a number of ways. Lack of quality early-childhood care and education impedes healthy development and kindergarten readiness. Inadequate access to preventive and basic remedial health care substitute sick days and emergency room visits for classroom time and reduce student awareness and focus in class. Hunger makes it hard for kids to concentrate. And a dearth of enriching, stimulating activities after school and over the summer drains away much of what is gained between 9 a.m. and 3 p.m. from September to June.

Brookings
By: Jennifer S. Vey
April 26, 2012

Building from strength: Creating opportunity in breater Baltimore's next economy

According to many broad economic indicators, the Baltimore metropolitan area is doing better than fine. In 2010, the median household income for the region was nearly $15,000 higher than for the country at large, and over the 10 years prior, real incomes rose in the metro, if slowly, even while incomes nationally shrank by more than 7 percent. Employment grew from 2000 to 2010 while declining nationwide, and during the economic downturn, the area's unemployment rate was consistently lower than the majority of its metropolitan peers.

The Huffington Post
By: Michael R. Bloomberg
April 26, 2012

Improving financial stability in America's cities

One of the most effective ways that government can fight poverty is to help individuals and families prepare for and manage financial distress -- when a job disappears, or wages are cut, or the bills pile up too high. And right now, with unemployment above 8 percent, and with many families struggling to make ends meet, we are a nation still in the throes of financial distress.

NPR
By: Dan Gorenstein
April 26, 2012

Concord nonprofit banking on trailer parks

When you hear 'trailer park' lots of people often think tornadoes, or...trailer trash.

Other than that, mobile home parks are ignored, really...just invisible. But actually millions of Americans live in these communities nationwide. Where most people see little of value, the Concord-based ROC USA sees hope for the American dream.

The Atlantic
By: Derek Thompson
April 25, 2012

Eric Cantor on raising taxes on the poor: 'You've got to discuss that'

Should we raise taxes on richer Americans? Eric Cantor has a clear answer. Absolutely, 100% no.

Should we raise taxes on poorer Americans? Eric Cantor has a different answer: "You've got to discuss that issue."

The Huffington Post
By: Eleanor Goldberg
April 25, 2012

Poorest county in America, Owsley County, celebrates prom

Up close, it could've been a classic prom scene in any U.S. suburb.

Girls swayed in big pouffy princess dresses and fussed with their pinned up hair. Dapper-looking guys linked arms with their dates as they posed for photos reserved for the family room.

But when Getty photographer Mario Tama pulled his camera back on Owsley County, where 41.5 percent of residents live below the poverty line, a grim picture of joblessness, teen parenting and struggle revealed itself.


The Huffington Post
By: Loren Berlin
April 25, 2012

Christopher Bryski, Rutgers student, died but his student loan lives on

When Christopher Bryski, a Rutgers University undergraduate student, died from a traumatic brain injury in 2006, his family wasn't thinking about his student loans. That is, not until KeyBank, a Cleveland-based institution with nearly $90 billion in assets, asked his parents to assume responsibility for his debt.

Now on Sale at Costco: Mortgages

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CNN
By: Les Christie
April 26, 2012

Now on sale at Costco: Mortgages

NEW YORK (CNNMoney) -- Costco shoppers can not only find bulk-packs of chicken wings, 24-rolls of toilet paper and large-screen TVs at a discount. They can now land themselves a mortgage.

New York Times
By: Jessica Silver-Greenberg and Ben Protess
April 26, 2012

Chasing fees, banks court low earners

When David Wegner went looking for a checking account in January, he was peppered with offers for low-end financial products, including a prepaid debit card with numerous fees, a short-term emergency loan with steep charges, money wire services and check-cashing options.

''I may as well have gone to a payday lender,'' said Mr. Wegner, a 36-year-old nursing assistant in Minneapolis, who ended up choosing a local branch of U.S. Bank and avoided the payday lenders, pawnshops and check cashers lining his neighborhood.

The Huffington Post
By: Joy Resmovits
April 24, 2012

Student loans; interest rate bill by George Miller would cut tax loopholes to keep rate down for a year

As President Barack Obama makes his way across the country to slam an impending increase in federal student loan-interest rates, a group of congressional Democrats is announcing plans to introduce a legislative fix.

Rep. George Miller (D-Calif.), the ranking member of the House Education and Workforce Committee, announced late Tuesday plans to introduce the "Stop the Student Loan Interest Rate Hike of 2012." According to Miller, the bill would prevent the interest rate for federally subsidized Stafford loans from doubling from 3.4 percent to 6.8 percent for one year.

The bill would pay for the extension of the interest-rate cut -- an estimated $6 billion -- by closing a loophole that allows Americans making more than $250,000 from certain corporations to avoid paying Medicare payroll taxes.

The Huffington Post
By: Anna Cuevas
April 24, 2012

2.3 million children are victims of foreclosure

Homeowners aren't the only ones who undergo challenges and struggles as a result of foreclosure. Their children are also likely to suffer due to the loss of the family home. Of the 2.3 million children who have lost their homes to foreclosure, one out of every 10 have been negatively affected, according to a report released by Julia B. Isaacs, Brookings Institution.

The Atlantic
By: Derek Thompson
April 24, 2012

America's secret growth weapon: Why immigration really, really matters

The United States, like almost every other rich country in the world, is getting older and slower. But we have a natural advantage over the rest of the world, if only we're wise enough to use it

When countries get rich, they can get predictable. They live longer. They get older. They use their wealth to pay for the insurance and security of the elderly. As the workforce moves away from farms into factories and cubicles, working parents tend to have fewer kids. Fewer children grow up to become fewer workers. And fewer workers paying into expensive programs ironically puts strains on the very wealth that made this all possible, in the first place.

TIME
By: Michael Schuman
April 24, 2012

Citi's CEO pay revolt: Capitalism is back, baby!

One of the more gratifying moments so far this year - at least in the realm of high finance - was the decision last week by shareholders of Citigroup to reject a $15 million pay package for CEO Vikram Pandit. The shareholders vetoed the award since they believed there was too big a disconnect between Pandit's pay and performance. As my colleague Christopher Matthews pointed out, Citi shares have plunged 80% under Pandit's leadership. In 2011, Citi's stock sunk 20% while the S&P 500 index jumped 6%. Now does that sound like a track record worthy of $15 million? The rebuke, though, is much more than comeuppance for another entitled CEO - more even than a blow to rampant corporate greed and excess in America. The revolt at Citi is a victory for capitalism, and a signal that, hopefully, more capitalism is on the way.

USA Today
By: Hadley Malcom
April 24, 2012

The cost of financial illiteracy; Millennials are just the latest generation to struggle with dollars and cents, yet this enduring national problem isn't getting any better

Paralyzed. That's how Paige Worthy feels when she thinks about budgeting her money.

"I freeze. I have no idea where to even start with this," the 29-year-old says.

Worthy has held at least six jobs since graduating from college in 2005. She lives in Chicago, where she works as a publication director at a non-profit press association -- but she plans to leave that job to do freelance content marketing starting next month. Over the past few years, she has "just scraped together," which she attributes to an unstable income and sporadic spending habits.

"Part of me feels like I'm way too old to be flying by the seat of my pants like that," she says.

Worthy has plenty of company in her generation. Studies show that a majority of young people in the United States have poor financial literacy, a trend that has been consistent over the past decade and shows few signs of improving. This at a time when young adults face a difficult job market and more personal debt, and yet must take greater responsibility for their financial future.

Today's twentysomethings hold an average debt of about $45,000, which includes everything from cars to credit cards to student loans to mortgages, according to a PNC financial independence survey released last month. Unemployment for those 18-29 is 12.4%, well above the national rate of 8.2%; and young people face an increasingly complex global economy that is credit-driven and puts more responsibility on individuals to plan for and manage their retirement accounts.

"If we live in a world where people are in charge of their own financial well-being ... we have to equip people to deal with this individual responsibility," says Annamaria Lusardi, an economics and accountancy professor and director of the financial literacy center at George Washington University.

How bad is the problem? The Treasury Department and Department of Education have teamed the past three years to assess financial literacy in U.S. high schools, and the results haven't been pretty: the average score of almost 76,900 students in 2010 was 70%. Last year's testing of about 84,000 students and this year's of about 80,000 students were both a point lower: 69%.

"We have a long way to go as a country," Secretary of Education Arne Duncan said in an interview Friday, in assessing the test results from the past three years. "There has been a devastating cost to a lack of attention, urgency and seriousness of taking this on," he said, noting that the housing crisis, low savings rate and poor retirement planning all flow out of the financial literacy issue.

The problem has been a long time coming. A biennial survey by Jumpstart Coalition for Personal Financial Literacy, conducted from 1997 to 2008 (when many Millennials were in high school) showed high school seniors doing even worse. In 1997, the average score on a 31-question financial literacy exam given as part of the survey was 57.3%. In 2008, the average score was at its lowest ever, 48.3%.

Laura Levine, president of Jumpstart, which plans to reinstate its survey next year after updating the questions, wouldn't say what a passing grade might be, adding that the industry hasn't settled on a standard. Even so, she says, "If someone only knows half (of the answers), that's a pretty good indication that we need to do better."

Few schools up to the job

Though young people in America have for decades struggled with financial literacy, state curricula haven't shifted much to address the gaps. Fewer than half of states make high school students take an economics class, and just 13 require a personal finance class, according to a 2011 survey by the Council for Economic Education. In those 13 states, though, the payoff is clear: Students who had taken such courses were more likely to go on to save money and pay off a credit card bill in full each month, and less likely to be compulsive buyers, max out credit cards and make late payments.

The biennial survey also shows that just 16 states require testing in economics, three fewer than in 2009. This regression is noted in the survey summary, which points out that over the past two years, the trend toward teaching on these subjects has slowed, and is "in some cases moving backwards."

To ensure that rising generations have the tools to be financially successful, financial literacy experts and advocates interviewed by USA TODAY say that education must start in the early years.

"My dream is that people get it in kindergarten and first grade," says Susan Beacham, CEO of financial literacy firm Money Savvy Generation, which provides financial education aimed at elementary school students. "Parents say, 'I have so much time; they're so young.' You don't teach your young child to brush their teeth at age 18."

Surveys show that parents, not teachers, have the greatest influence on a child's financial literacy. Yet Beacham notes that many parents aren't fully equipped to deal with their own finances and are often too distracted with other issues associated with raising a child.

"Today's parents are concerned, busy, overwhelmed, trying to keep kids off drugs and alcohol. They do not wake up in the middle of the night in a cold sweat thinking, 'Oh my God, I didn't teach them about money,'" she says.

Pam Schmidt, of Chandler, Ariz., says that while she and her husband have set up savings accounts and college funds for their two young children, and invested in bonds for them, she acknowledges feeling "behind" about financially preparing the kids for their future. The 40-year-old says they got "a wake-up call" when their 8-year-old daughter, after receiving money from her grandparents on Valentine's Day and promptly putting it in her savings account, said, "If I want something, you guys just buy it for me."

The parental instinct to provide for your children can actually be detrimental to preparing them to be financially independent. Beacham says it's an "unintended consequence" that leaves adult children unprepared to handle their own finances. "You feel like a good parent if you're taking care of your child," she says. "(But) the reason kids on college campuses don't know anything about money is because they have no skin in the game because their parents are still paying. Their child is going to pay a much higher price for the lack of experience and knowledge they have on graduation day."

'An issue of equality'

But leaving responsibility for financial education solely on parents creates an unequal playing field, Lusardi says. In a paper published in 2009 examining youth financial literacy using data from the National Longitudinal Survey of Youth, the authors (Lusardi is one) found that "financial knowledge among the young is strongly influenced by family background."

The study, conducted by the Bureau of Labor Statistics, tracks and annually surveys about 9,000 people who were between the ages of 12 and 16 at the end of 1996. The paper Lusardi helped write analyzed financial literacy questions added to the longitudinal study conducted in 2007-08 and found that of the 27% of survey respondents considered financially literate, a disproportionate number were white males from college-educated families. Hispanics and those without a high school diploma fared the worst.

Paulo Fernandes, a 22-year-old senior at Nichols College in Dudley, Mass., says he had to teach himself how to manage everything from his student loans to his credit card. "I just kind of do what I have to do," he says. He couldn't rely on his two older siblings or mother, none of whom went to college.

"It's an issue of equality," Lusardi says. "Not everybody is given an opportunity (at home) to be financially literate. This is a topic that should be in the schools."

Jenny Gomez says she "would have loved a finance class in high school." Since graduating in 2000, the 29-year-old decided against college to pursue an acting career, and since then has also worked as a waitress, nanny, barista, bartender and even a bouncer. She started her "first real salary position" about a month ago in New York City, working as a marketing coordinator.

"I'm only just now starting to budget myself and thinking about saving," she says, adding that she learned the hard way about some things, such as that closing a credit card account can lower your credit score.

Gomez thought she had great credit considering she never carried a balance on her cards, but when a landlord ran a credit check last month as she was trying to rent an apartment, she found out otherwise. "I closed a bunch of credit cards because I thought you were supposed to pay them off and close them," she says. "I had no idea that this would affect (my score)."

Long-term consequences

Whether they're learning about managing money, or not, at home or in school, the lack of financial savvy among Millennials could have a trickle-down effect with detrimental consequences for society, experts say.

Young adults with too much credit card debt can be precluded from certain jobs, and poor financial decisions can force some to drop out of school, says Ted Beck, CEO of the National Endowment for Financial Education. And if the next generation is unable to "continually acquire skills," he says, the United States is left with an uncompetitive and unattractive workforce that by necessity will lean more on social programs.

Beacham takes it one step further: In order to pay their unwieldy debts, she says, young people will have to seek higher-paying jobs, and the nation won't have "enough social workers, teachers, musicians. That in itself would be a high-class problem."

Beck says today's young adults are "a test-case generation of what's to come. They'll be responsible for their financial lives to a much higher degree than previous generations. We have to figure out how to improve their knowledge base so they don't dig a hole."

John Whiting, a certified financial planner and partner at Moss Adams Wealth Advisors in Santa Rosa, Calif., started teaching his kids the importance of working to earn money, saving and making responsible spending choices when the two were in elementary school. His son Andrew, 23, remembers getting his first job in catering at 15 and having to buy the family car when he got his driver's license.

"I had saved money up, and they told me there was only one car I could get; it was the one they owned, and I had to pay them for it," says Andrew, who graduated from California Polytechnic State University last May. He recently began a job as an account executive for Yelp in San Francisco, with his financial skills in tow: He uses an Excel spreadsheet to track his spending, is looking into getting his first credit card and plans to put about 25% of his pay into savings.

"I'm more wary about my finances than a lot of people, I realize," Andrew says.

Many organizations focused on financial literacy are determined to reverse the national trend. Jumpstart Coalition targets children as early as prekindergarten, and the Council for Economic Education works with students in kindergarten through high school. Others, such as FoolProof, offer free online training for young adults through videos and interactive "modules."

The programs could prove vital to educating the next generations of workers. As Council for Economic Education President Nan Morrison says, "A financially illiterate society is not an option."

---

$25,000
Average student loan debt for class of 2010 (The Project on Student Debt)

$1,800
Average credit card debt for those 20-29 (PNC financial independence survey, March)

12.4%
Unemployment rate for those 18-29 (BLS data, March)

13
States that require high school students to take a personal finance class (Survey of the States, 2011)

60%
18- to 34-year-olds not keeping a budget (NFCC financial literacy survey, 2012)

The Huffington Post
By: Steven Kurlander
April 20, 2012

Unbanking America: Entrepreneur develops alternative to paper money, banking system

The Canadian government recently announced that the Royal Canadian Mint would soon stop producing that country's penny and begin taking it out of circulation.

The elimination of the Canadian penny will affect only cash transactions, which will now be figured in increments of five cents in Canada -- rounding off to the nearest cent will still take place on electronic transfers. The reason for the discontinuance of the penny is simple: the Canadian government determined that the use of the coin was outdated and a burden on the economy.

Another factor: Because it costs 1.6 cents to produce a penny, the Canadian government also loses an estimated $11 million, in Canadian currency, a year in producing the copper coated steel coin. With the uptick in commodity prices, minting coins has become expensive.

There is now renewed talk about eliminating the penny in the United States, too, which is estimated to cost the US Mint 2.41 cents to produce. In reality, no one really uses pennies anymore.

The Atlantic
By: Jordan Weissmann
April 23, 2012

53% of recent college grads are jobless or underemployed--how?

More than half of America's recent college graduates are either unemployed or working in a job that doesn't require a bachelor's degree, the Associated Press reported this weekend. The story would seem to be more evidence that, regardless of your education, the wake of the Great Recession has been a terrible time to be young and hunting for work.

The Washington Post
By: N.C. Aizenman
April 23, 2012

Social security's financial forecast gets darker; Medicare's outlook unchanged

Surging energy prices and a slower-than-expected economic recovery have worsened the financial outlook for Social Security compared with last year, while the picture for Medicare remains grim but essentially unchanged, according to annual forecasts released by the government Monday.

The trustees overseeing Social Security reported that the program's trust fund will be depleted by 2033 -- three years earlier than projected last year. After that, incoming Social Security tax revenue will cover only three-fourths of the benefits scheduled to be paid out through 2086, requiring Congress to either increase taxes or reduce benefits.

The fiscal health of Social Security declined even more precipitously according to another, somewhat technical measure. This statistic reflects the difference over the next 75 years between projected benefits and the expected annual income of the American workers whose taxes will finance them. This measure reached its worst level since the early 1980s, when the trust fund's imminent insolvency prompted Congress to enact a variety of changes.

The Wall Street Journal
By: William McGurn
April 23, 2012

McGurn: what's U.S. citizenship worth?

People say the dollar isn't what it used to be. Apparently neither is a United States passport. Last year, nearly 1,800 American expatriates renounced their citizenship, according to Treasury Department figures.

What gives?

CNN
By: Nina Easton
April 24, 2012

Don't blame the 1% for America's pay gap

FORTUNE -- What if I told you that there was a group of hard-driving workaholics who tend to have advanced degrees and bring a level of talent and skill to their jobs that attracts premium pay in the global economy? Scholars have found that this group is more likely than much of the population to raise their children in two-parent homes.

You might think this was a group people would admire, even emulate, right? Not so. For this is the much-maligned 1%, whose media infamy via the Occupy Wall Street protests, followed by President Obama's populist reelection message, is now firmly embedded in the American psyche.

The Huffington Post
By: Peter S. Goodman
April 19, 2012

Foreclosure crisis the result of rampant greed or education gap?

In the popular imagination, the American foreclosure crisis is a morality play in which comeuppance has landed on greedy people who had it coming. Homeowners gorged on the wealth they took out of their properties like gluttons at a Vegas buffet, using exotic mortgages to fill living rooms with home theaters and garages with new cars.

CNN
By: Jennifer Liberto
April 20, 2012

Obama pushes to keep low student loan rates

WASHINGTON (CNNMoney) -- President Obama will use his bully pulpit to urge lawmakers to prevent a doubling of interest rates on federally subsidized student loans.

On July 1, the interest rate on federal subsidized loans will go from 3.4% to 6.8%. That means students taking out loans for the next school year will have to dig deeper in their pockets to pay them off.

"If we want to keep jobs in our country, we have to have an educated work force," Secretary of Education Arne Duncan said Friday. "We have to educate our way to a better economy."

NPR
By: NPR Staff
April 22, 2012

Poverty in America: defining the new poor

Welfare reform in the 1990s helped slash cash benefit rolls, yet the use of food stamps is soaring today. About 15 percent of Americans use food stamps. They've become what some call the new welfare.

A big reason why is a deal struck between President Clinton and the Republican-controlled Congress in 1996. At that time, the number of Americans who received cash payments -- what's often thought of as welfare -- was at an all-time high.

The Clinton overhaul made it much harder to qualify for those payments, and today the welfare rolls are down 70 percent, but that's only if you define welfare in one way.

"We decided cash assistance is welfare and that's bad, but we decided food aid is nutritional assistance and that's good," says New York Times reporter Jason DeParle. "We made [the food stamp] program much easier to get on."

TIME
By: Dan Kadlec
April 23, 2012

Financial literacy: U.S. trails ... Brazil and Mexico?

The global movement to teach individuals how to better handle their financial affairs is just getting started, and a survey that Visa International will unveil today shows just how far the movement has to go. Financial literacy scores in the 28 nations that were polled topped out at just over 50%-a flunking mark by almost any standard.

The highest score went to Brazil (50.4%), followed by Mexico (47.8%), Australia (46.3%), the U.S. (44.6%), Canada (43.8%) and New Zealand (43.7%). At the bottom were Pakistan (27.3%), Indonesia (27.7%), Vietnam (31.8%), South Africa (34%) and Morocco (34.4%). While all the scores were low, countries at the top generally are regarded as having the strongest financial education policies, especially Australia, Canada, New Zealand and the U.S. So perhaps there has been some payoff.

The Washington Post
By: Olga Khazan
April 18, 2012

What's next on the entrepreneurship policy agenda? Opower, YEC and others tell Congress

Now that the so-called JOBS Act has passed, Congress is searching for the next big idea to give entrepreneurs a boost. The Jumpstart Our Businesses Act aimed to simplify the fundraising process for small companies and reduced the requirements for them to go public. Entrepreneurs and investors were largely pleased with the outcome, but some say further policies are necessary to enhance small-business growth .

Not all foreclosures are equal

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The Washington Post
By: Michelle Singletary
April 21, 2012

Not all foreclosures are equal

We know from numerous reports that the housing crisis hit minority families pretty hard. Minority homebuyers by the tens of thousands were trapped in predatory mortgage loans and, as a result, their communities disproportionately felt the impact of foreclosures.

Now fair-housing organizations have filed complaints with the U.S. Department of Housing and Urban Development, alleging discrimination in the marketing and maintenance of foreclosed properties in minority neighborhoods in nine major cities. The banks targeted by the National Fair Housing Alliance and four of its member organizations are U.S. Bank and its parent company, U.S. Bancorp, along with Wells Fargo.

The Atlantic
By: Derek Thompson
April 19, 2012

The paradox of college: the rising cost of going (and not going!) to school

Have you heard about the dangerous, rising cost of not going to college? In the last 30 years, the typical college tuition has tripled. But over the exact same period, the earnings gap between college-educated adults and high school graduates has also tripled. In 1979, the wage difference was 75%. In 2003, it was 230%.

Over the last three decades, the cost of going to college has increased at nearly the exact same rate as the cost not going to college. How can the price of getting something and not getting something both rise at the same time?

That is the paradox of college costs.

The Washington Post
By: Jared Bernstein
April 19, 2012


TARP worked, but it's not the end of financial reform

The Troubled Assets Relief Program (TARP) worked a lot better, and at a much lower cost, than is commonly recognized.

TARP and related interventions by the Federal Reserve helped reactivate credit markets long before they would have recovered on their own, helped to stabilize the housing market, helped save the U.S. auto industry and helped prevent recession from morphing into something worse. And they did so for far less than early estimates and prior rescues had suggested were possible.

My wasted day on Capitol Hill

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The Washington Post
By: Vivek Wadhwa
April 20, 2012

My wasted day on Capitol Hill

With the economy still in the doldrums, our political leaders are desperate to find ways to boost economic growth. Innovation and entrepreneurship are among the most obvious pathways to a solution. Both were the subject of a hearing held by the U.S. Senate Committee on Small Business & Entrepreneurship chaired by Sen. Mary Landrieu (D-La.), Wednesday. I was asked to participate in the discussion with other academics, government officials and entrepreneurs.

I left the hearing feeling depressed.

Economic reports fan fears

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The Wall Street Journal
By: Ben Casselman and Nick Timaros
April 19, 2012

Economic reports fan fears

Rising layoffs, falling home sales and slowing manufacturing activity are sparking fears that the economic recovery is headed for a springtime stall for the third year in a row.

New data Thursday provided fresh evidence that the job market is losing the momentum it built earlier this year, which could pressure fragile housing markets that have been showing signs of life. Separate reports this week suggested that the factory sector, a source of strength in the recovery, now is being hurt by weak growth overseas.

The Huffington Post
By: Saki Knafo
April 19, 2012

Homeless children living on the highway to Disney World

Melissa was always on the move, wandering in and out of people's rooms, going from pool to basketball court and back to pool, climbing up the big trees by the parking lot. Even before she came to the hotel her life was a blur of movement -- six houses in four years and never more than a year at the same school. But soon the moving around would be over. That's what her parents said anyway. Her mom was expecting a check from the government and when it came they'd finally have the funds to move into a real house where Melissa would have her own room.

Spotlight on Poverty and Opportunity
By: Amy Saltzman
April 17, 2012

Tax time can be opportunity time for low-income entrepreneurs

Relief is likely the dominant emotion felt today by tax payers racing to the post office to file those last minute returns. "Opportunity," on the other hand, is not a word that typically comes to mind during tax season. For millions of low-income, self-employed individuals, however, tax time offers the ideal opportunity to grow their businesses, build assets and move up the economic ladder.

The Wall Street Journal
By: Emily Chasan
April 18, 2012

Small-firm loans lagged in the US

Lending to small and medium-size businesses after the recession recovered more slowly in the U.S. than in other countries such as Canada, France and Italy, according to a report expected to be released Thursday by the Organization for Economic Cooperation and Development.

Washington Post
By: Dan Eggen & T.W. Farnam
April 18, 2012

Payday lenders up their contributions to candidates

The payday loan industry is spending big on politics in advance of expected scrutiny from the federal government's new financial watchdog agency.

Washington Post
By: Dan Eggen & T.W. Farnam
April 18, 2012

Payday lenders up their contributions to candidates

The payday loan industry is spending big on politics in advance of expected scrutiny from the federal government's new financial watchdog agency.

TIME
By: Martha C. White
April 19, 2012


Need a mortgage? Better hope your credit record is almost perfect

Credit requirements for home loans have remained very restrictive even as banks are offering credit cards and car loans to riskier borrowers. This has been pretty well-documented, but until now, nobody had actually crunched the numbers to figure out just how good your credit needs to be if you want to buy a house or refinance your existing mortgage. We've been hearing "720 is the new 680″ for a couple of years now. As it turns out, that's wrong. Even a credit score of 720 isn't necessarily good enough anymore.

NPR
By: Tamara Keith
April 18, 2012

Most small businesses don't quite fit the political picture

The House is scheduled to vote Thursday on a GOP measure to cut taxes on small businesses.

Now, the mental image most of us have of a small business is probably something like this: a handful of employees, a shop, maybe a restaurant or a little tech firm.

It turns out the reality of the nation's 28 million small businesses is, in many cases, quite different.

The Huffington Post
By: Dean Baker
April 18, 2012


The son of the housing bubble: first-time homebuyers tax credit

It's often said that the difference between the powerful and the powerless is that the powerful get to walk away from their mistakes while the powerless suffer the consequences. The first-time homebuyers' tax credit provides an excellent example of the privilege of the powerful.

The first-time homebuyers tax credit was added to President Obama's original 2009 stimulus package. It was introduced by Senator Johnny Isakson, a Republican from Georgia, but the proposal quickly gained support from both parties. The bill gave a tax credit equal to 10 percent of a home's purchase price, up to $8,000, to first time buyers or people who had not owned a home for more than three years. To qualify for the credit, buyers had to close on their purchase by the end of November, 2009, however the credit was extended to buyers who signed a contract by the end of April, 2010.

SC Now
By: Brie Jackson
April 19, 2012

Poverty affects Horry County students

Horry County educators continue to examine ways to address the achievement gap. A report presented to the county Board of Education showed disparities in several areas. The impact of poverty is one cause of concern. Local leaders said they want to figure out what programs help students achieve in school and can those initiatives also help other Horry County students be successful.

The Wall Street Journal
By: Sue Shellenbarger
April 17, 2012

To pay off loans, grads put off marriage, children

Between the ages of 18 and 22, Jodi Romine took out $74,000 in student loans to help finance her business-management degree at Kent State University in Ohio. What seemed like a good investment will delay her career, her marriage and decision to have children.

The Huffington Post
By: Daniel Cubias
April 16,2012

Who is the next generation of entrepreneurs

So the Baby Boomers, as they are wont to do, are ready to take the money and run. Apparently, many older entrepreneurs will soon sell off their businesses and retire.

Well, we shouldn't worry. After all, entrepreneurialism is a cornerstone of the fabled American Dream, and small businesses drive the economy. So I'm sure some young, smart, hardworking go-getters will keep the new ideas coming... unless of course, we've decimated education, promoted ignorance, and ravaged the social safety net to the point that we are unleashing a generation ill-equipped to tap into their own creativity.

Okay, now I'm worried.

NPR
By: Tamara Keith
April 18, 2012

Small businesses get big political hype. What's the reality

The House is scheduled to vote this week on a small-business tax cut bill offered up by Republicans. It's just the latest piece of legislation to focus on small businesses, which are widely praised in the political discourse as engines of job creation. The adoration is nearly universal -- and it reflects something beyond economic reality.

TIME
By: Martha C. White
April 18, 2012

Prepaid debit cards: the lesser of two evils

"I'd take the $3.95 any day over the $35 overdrafting or for some other fees."

This statement, from a focus group participant, neatly sums up America's evolving attitude prepaid debit cards. We don't like the fees, but we like banks even less -- and trust providers of prepaid cards more than we trust mainstream banks, according to the Pew Health Group, which conducted the focus groups. And more of us than ever feel that way. Nearly one in five Gen Y and "underbanked" consumers use prepaid debit cards, according to a new study by Javelin Strategy & Research, which finds that the overall percentage of consumers who use them climbed from 11% in 2010 to 13% last year. Research done by Mercator Advisory Group says that in 2009, $28.6 billion was loaded onto prepaid debit cards, an amount that's expected to skyrocket to $201.9 billion by next year.

The Atlantic
By: Marty Nemko
April 18, 2012

Why the U.S. economy is biased against men

You've just landed on Planet Zuto.

The Intergalactic Equal Employment Opportunity Commission (IEEOC) has sent you to determine whether Zuto's economy is fair to its two sexes: vozems and zems. Your boss suggests you'll probably find sexism against the vozems.

The Washington Post
By: Ezra Klein
April 18, 2012

Wonkbook: the 'recovery' has made inequality worse

Early in the recession, there was some talk that the economic crisis would, among other things, slow or even reverse the run-up in inequality. It didn't. In fact, the recovery, such as it is, has made inequality worse.

The Wall Street Journal reports that new numbers out of the Labor Department show that between the mid-2009 -- the technical end of the recession -- and the first quarter of 2012, workers in the top 10% of the income distribution saw their wages rise by 7% percent. Workers in the bottom 10% only saw their wages rise by 2.5%.

The Wall Street Journal
By: Holman W. Jenkins, Jr.
April 17, 2012

Jenkins: the inequality obsession

If it were learned that the car driven by the average American is 10 times more likely to burst into flames than the car driven by the richest 1%, what should the policy response be? Should it be to mandate that cars driven by the rich burst into flames more often?

Income inequality is a strange obsession, at least to the extent the obsessives focus their policy responses on trying to adjust the condition of the top 1% rather than improving the opportunities of everyone else.

The Daily Herald
By: Juergen Kneifel
April 16,2012

Financial literacy at the core of good small business

Perhaps you're aware that April is Financial Literacy Month. It certainly seems appropriate, given that many of us have been pouring through receipts, tax forms and reconstructing our personal finances from 2011 recently -- a reminder why most Americans dread accounting.

In fact, financial literacy is critical for small business success.

The New York Times
By: Sabrina Tavernise
April 17, 2012

Antipoverty tax program offers relief, though often temporary

DURHAM, N.C. -- Karen Spain spent several long months before receiving her tax refund this year in a state of suspended panic. The rent was three months late. Her car's brakes were shot. And she could no longer afford to pay her electricity bill.

So when the refund finally arrived -- a $7,200 cash infusion that was about a third of what she earned all last year as an assistant manager at an auto parts store -- it brought a certain measure of relief, both financial and psychological. That did not last long.

TIME
By: Christopher Matthews
April 17, 2012

Building a better bailout: can Fannie and Freddie help American homeowners

Since the financial crisis, American taxpayers have collectively made all sorts of investments that would have been unthinkable ten years ago. We bought stakes in the auto and insurance industries and, perhaps most significantly, the residential housing market. Fannie Mae and Freddie Mac, the Government Sponsored Entities (GSEs) that the American government has taken under conservatorship, own or guarantee 60% of the outstanding mortgages in America. That's right, we are financially exposed to over 48 million mortgages. If a given home owner pays back his loan, plus interest, we'll make a nice return on the investment. But if that homeowner defaults, we're all on the hook for the loss.

TIME
By: Brad Tuttle
April 16, 2012

Maybe the slackers who never set a budget know something

A new study questions the long-accepted wisdom of setting a budget and sticking to it. The purpose of establishing a budget is to rein in one's spending, but under certain circumstances, setting a budget does the opposite -- and actually increases the likelihood you'll spend more.

The Atlantic
By: David Rohde
April 13, 2012

Why Obama is winning the battle for middle America

Barack Obama is going to save America's middle class by taxing the rich and fostering an American manufacturing renaissance. Mitt Romney is going to revive it by creating more jobs for women and rewarding successful people instead of punishing them.

Welcome to the so-far deeply disappointing 2012 general election. This week's middle-class-related broadsides from both campaigns bordered on the comic.

The Huffington Post
By: Alan Fram
April 16, 2012

'Buffett Rule' would impact small fraction of taxpayers

WASHINGTON -- President Barack Obama's proposal to impose a "Buffett rule" tax on the rich is generating enormous political wattage, but the plan itself would directly affect only a tiny fraction of Americans.

4-traders
April 16, 2012

NYSE Euronext: celebrated third annual financial literacy week

Attendees participated in a full week of conferences, panel discussions and bell ceremonies to celebrate Global Financial Literacy Month
New York, NY April 16, 2012 - In celebration of Financial Literacy Month, NYSE Euronext (NYX) hosted its third annual Financial Literacy Week. More than 100 guests gathered at the company's offices in the U.S. and Europe to celebrate, highlight and share innovative approaches to financial capability.

"NYSE Euronext is committed to financial literacy efforts both on the corporate side and through the NYSE Euronext Foundation. We are uniquely positioned to help promote workplace financial fitness through our network of the world's leading companies, and we partner with companies and leading non-profits to help improve the financial capability of employees, teachers, students and people throughout our communities. Our Financial Literacy Week is designed to raise awareness of the importance of this issue, highlight organizations doing great work, and bring together thought leaders to discuss innovation and the future of the field," said Michelle Greene, Head of Corporate Responsibility for NYSE Euronext and Executive Director of the NYSE Euronext Foundation.

In celebration of Financial Literacy Week, U.S. bell ceremonies were celebrated by the winners of the first annual Workplace Leaders in Financial Education (WLIFE) Awards, The President's Advisory Council on Financial Capability, The Cities for Financial Empowerment, the Network for Teaching Entrepreneurship, the Council for Economic Education and the Center for Financial Services Innovation. Bell ceremonies in both New York and Paris celebrated NYSE Euronext's global partnership with Junior Achievement. In addition, a bell ceremony in Amsterdam featured an initiative from the Ministry of Finance called "The Money Wise Platform," which is focused on increasing the public's financial insight so consumers are better able to make sound financial decisions.

Conferences were also held at the New York Stock Exchange in conjunction with the bell ceremonies. NYSE Euronext partnered with the Cities for Financial Empowerment (CFE) to convene a high level discussion on innovative approaches to financial stability and growth. The panelists included CFE co-chairs Jose Cisneros, the Treasurer of San Francisco, and Jonathan Mintz, the Commissioner of Consumer Affairs for NYC, as well as Linda Gibbs, Deputy Mayor of New York City, Andrea Levere, CEO of CFED and Ben Hecht, President and CEO, Living Cities.

NYSE Euronext also partnered with Discovery Education to produce a Virtual Field Trip - a one hour broadcast to students around the world on the history of NYSE Euronext, including a virtual tour of the New York Stock Exchange trading floor, interviews with company executives, and a live Q& A session with Duncan L. Niederauer, Chief Executive Officer.

The week concluded with a panel discussion in partnership with the Center for Financial Services Innovation featuring a keynote address by Cyrus Amir-Mokri, the U.S. Department of the Treasury's Assistant Secretary for Financial Institutions. This discussion was attended by the nation's leading authorities on financial services for under-banked consumers.

The Huffington Post
By: Jo Comerford
April 14, 2012

Fifth grader says: 'I'm kind of mad at the government'

"If we had a trillion dollars," dream the youth of Bresee Community Center in Los Angeles, "we would buy materials to build homeless shelters, rehabilitation centers, skate parks and soccer fields."

Young people from the Little Red School House and Elisabeth Irwin High School in New York City would buy 7,867,443,030 lifesaver water bottles to decrease the water-borne illnesses that claim countless lives globally.

Des Moines Register
By: Lynn Hicks
April 15, 2012

Lending to 'unbanked' could work in Iowa

Iowa has 344 community banks, 130 credit unions and about 25 national or regional banks. But none of them do what a bank in Omaha does.

The Grameen Bank gives small loans to the unbanked in Omaha and Council Bluffs -- poor women, mostly Latino, all entrepreneurs. The women meet in small groups weekly and hold themselves accountable. Bit by bit, they repay the loan. And bit by bit, the women begin to lift themselves from poverty.

Isn't it time for Des Moines to have a similar microfinance organization? The share of people in poverty in the capital city has risen from 11.4 percent in 2000 to 17.7 percent in 2010, according to the Census Bureau's American Community Survey.

The Atlantic
By: Derek Thompson
April 12, 2012

How confirmation bias shapes the debate over income inequality

Confirmation bias is a weird and powerful thing. Two people can look at the exact same information and come to opposite conclusions. Take, for example, the economic fact that tax revenue has averaged less than 19 percent of GDP for the last few decades. Republicans and Democrats both acknowledge this number to be true. But what does it mean? Everybody thinks they know.

The New York Times
By: Michael Winerip
April 15, 2012

Opening up a path to four-year degrees

PHILADELPHIA -- At the end of his first year at the Community College of Philadelphia, Christopher Thomas decided that his goal -- to go back to school and get a degree -- was no longer worth it. He was in debt from thousands of dollars in student loans. After class, he rode a bus an hour and a half to a suburban restaurant where he worked as a waiter. When the shift ended at midnight, it took him three buses to get home. He couldn't afford a computer, so in the middle of the night, he walked to his aunt's house and used hers to finish his class work.

He got seven A's and a C, but the plan was for eight.

Mr. Thomas was 36, living in a spare bedroom at his grandmother's house and doing much of his sleeping on the Route 124 bus. "I'm done," he told friends.

The Washington Post
By: Patricia Sullivan
April 13, 2012

Alexandria sees drop in affordable-housing money

A "dramatic reduction" in federal housing money will reduce by $905,000 the money available for Alexandria residents who need help with housing costs, city officials said, further shrinking the stock of affordable rental housing.

The New York Times
By: Ann Carrns
April 12, 2012

A look at why consumers are using prepaid debit cards

It's clear that prepaid debit cards -- cards that you load with cash, spend down and then reload -- are hot.

In 2009, consumers loaded roughly $29 billion on such cards, which are especially popular with young adults and those considered underbanked -- meaning they have little access to mainstream financial institutions like banks. But by next year, that amount is expected to reach $202 billion, according to an estimate cited in a report from an arm of the Pew Charitable Trusts. Even the budgeting guru Suze Orman is marketing a prepaid card.

So to gain insight into why consumers are using the cards, researchers from Pew's Safe Checking in the Electronic Age project convened focus groups last fall in Houston and Chicago.

The Huffington Post
By: Janean Chun
April 12, 2012

Tax havens report: small businesses pay the price for big corporations

When big corporations use offshore tax havens, small businesses pay the price -- literally. If they were to cover the cost of corporate abuse of tax havens in 2011, the average U.S. small business would pay $2,116, according to a report released Tuesday by consumer group U.S. PIRG. The estimate is based on Census numbers for businesses with fewer than 100 employees.

TIME
By: Alison Rogers
April 12, 2012


Foreclosures are at a 4-year low, but that's not necessarily good news

Foreclosure filings fell in March to their lowest level in four years, according to real estate data provider Realty Trac. For the first time since July 2007, the nationwide number of filings fell under 200,000 -- a 4% drop from the month before and a 17% decrease from March of 2011. However, the news isn't as good as it may sound.

A closer look at the data reveals a complicated housing market, one that is still likely to get worse before genuine, long-lasting improvements take place.

Culture of poverty in America

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The Huffington Post
By: Linetta J. Gilbert
April 12, 2012

Culture of poverty in America

An interesting new tool called the Opportunity Index, a ranking developed by a coalition of groups known as Opportunity Nation and an evaluation team called Measure of America, aggregates levels of access to opportunity for persons living in various U.S. communities. The Index ranks Minnesota as the second highest state in the nation. Indicators of opportunity measured include the state of the local economy, access to education and community health and civic life. While perusing other information about disparities that contribute to poverty in the U.S., I found this statement below in an article from the Blue Cross Blue Shield Foundation of MN:

Income and education are among the most potent determinants of health. Simply stated, the rich are healthier than the middle class, who are in turn healthier than the poor.
This statement leads me to believe that the same conditions that contribute to poverty in the rural southeast and the urban northeast also remains a challenge in Minnesota. The article confirms the suspicions of many of us in the poverty alleviation field, that the cycle of poverty is created and sustained by multiple issues feeding into one another throughout low-income communities in the U.S. We are also learning that there is great need to create focused interventions at the community level around several critical factors simultaneously to result in healthier, more prosperous, and more sustainable communities.

Burlington Free Press
By: Eileen Elliott
April 12, 2012


My turn: to succeed, everyone must eat

I am shocked and saddened that it has become an applause line in the presidential campaign to call Barack Obama "the Food Stamp President." Although I dislike the partisanship, it is the sweeping condemnation of hungry, low-income people that really upsets me.

The sad reality is that too many of us are only a few paychecks or a catastrophic illness away from needing food assistance. Under different circumstances, the faces of the hungry could be our own and those of our kids.

The rich are richer than us

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The Washington Post
By: Michelle Singletary
April 12, 2012

The rich are richer than us

We knew there were folks living in America who were more prosperous than most of the population, but the gap wasn't always as large as it is now. There once was a time when the top executives running the companies we work for were "normal rich." But now these executives are luxuriating with insane wealth, their pay having skyrocketed 400 percent in the last 40 years. The rest of us, whose income has been essentially static, are just trying to keep our jobs and homes.

The rich are richer than us

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The Washington Post
By: Michelle Singletary
April 12, 2012

The rich are richer than us

We knew there were folks living in America who were more prosperous than most of the population, but the gap wasn't always as large as it is now. There once was a time when the top executives running the companies we work for were "normal rich." But now these executives are luxuriating with insane wealth, their pay having skyrocketed 400 percent in the last 40 years. The rest of us, whose income has been essentially static, are just trying to keep our jobs and homes.

"The evolution of executive grandeur -- from very comfortable to jet-setting -- reflects one of the primary reasons that the gap between those with the highest incomes and everyone else is widening," wrote Peter Whoriskey in The Washington Post's award-winning series "Breakaway Wealth."

The series written by Whoriskey, Steven Mufson and Jia Lynn Yang, just received top honors from the Society of Professional Journalists. The special report focused on business executives who make up more than 40 percent of the top earners. A mounting body of economic research indicates that the rise in pay for company executives is a critical factor in the growing income gap.

The largest single chunk of those highest-income earners, it turns out, are company executives and other managers, according to a landmark analysis of tax returns by economists Jon Bakija, Adam Cole and Bradley T. Heim. These are not just Wall Street executives, but also those from firms in relatively mundane fields such as the milk business.

Other recent research indicates that executive compensation at the nation's largest firms has roughly quadrupled in real terms since the 1970s, even as pay for 90 percent of Americans has stalled, the series found.

As the series points out, defenders of extremely lucrative executive pay have argued that today's chief executives are worth more because, among other things, companies are larger and more complex. But critics (and I) question why so much of the income growth should go to those who already have the biggest bank accounts in the country.

Read the series, and tell me what you think. The Color of the Money Question of the Week: "How do you feel about the growing disparity between the super wealthy and everyone else?" Send your response to colorofmoney@washpost.com, and put "Breakaway Wealth" in the subject line. Be sure to include your full name, city and state.

Celebrity Cash

Well, some people who were rich aren't anymore.

Add former NFL player Warren Sapp to the long list of athletes, actors and entertainers who spend themselves poor - or at least relatively poor, compared to the riches they used to have.

TMZ.com broke the story that Sapp has filed for Chapter 7 bankruptcy protection and owes his creditors more than $6.7 million. The debts include hundreds of thousands of dollars in child support payments, $853,000 to the IRS and more than $90,000 in medical bills.

Sapp, a former defensive tackle for the Tampa Bay Buccaneers and the Oakland Raiders during his 13-year NFL career, was also once a contestant on ABC's "Dancing with the Stars."

The states taxing the poor most

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24/7 Wall Street Wire
By: Charles B. Stockdale
April 12, 2012


The states taxing the poor most

In an effort to help families work their way out of poverty, most of the United States do not tax the incomes of working-poor families. A handful of states do, however. 24/7 Wall St. examined a new report from the Center on Budget and Policy Priorities to identify the states that tax the poor the most.

Huffington Post
By: Bonnie Kavoussi
April 11, 2012

Student loan debt: your student loans could have paid for 240 iPods (graphic)

Did you know that the money you're spending on student loans could have bought 240 iPods?

Now, we're not quite sure what one would do with 240 iPods, but the figure is still astounding.

The Atlantic
By: Derek Thompson
April 11, 2012

Women, money, and bias: 'the economy is classist, then Racist, then sexist'

This week we posed a provocative question in our ongoing crowd-sourced series "Working It Out": Is the economy a level playing field for men and women, or are the cards stacked against one sex -- as the result of workplace sexism or the natural evolution of the economy?

Your responses were fabulous: nuanced, evidence-based, and diverse. You wrestled with the fact that women were staying in school longer than men, but earning less by degree at every level. You addressed the mommy track, where what looks like sexism to researchers seems more like a family decision on an individual level. You even quoted liberally from the Bureau of Labor Statistics!

Here are the best commments so far. Keep writing, and we'll keep reading and posting.

TIME
By: Martha C.White
April 11, 2012

Uh-oh: subprime lending comes roaring back

"Even I wouldn't make a loan to me." That kind of admission from a borrower ought to be a tip-off that banks shouldn't be showering him or her with car financing and credit card offers, but lenders hungry to raise revenue are turning again to the business practices many contend turned "too big to fail" and "bailout" into household terms.

The number of subprime borrowers -- people with credit scores of 660 or lower -- issued new credit cards shot up by roughly 12% over the past year, the New York Times reports, citing data from credit bureau Equifax. The article tells the stories of people who have gone through bankruptcy, had cars repossessed and even were sued by debt collectors -- who are getting a slew of direct-mail offers for credit.

BenefitsPro
By: Paula Aven Gladych
April 11, 2012

In financial pinch, most Americans still save for retirement

Americans would rather change what they eat than give up their cell phones, downloads or digital TV services, according to a new survey conducted for the American Institute of CPAs by Harris Interactive. The good news is that only a small percentage of those surveyed said they would cut contributions to their retirement accounts.

The Huffington Post
By: Joy Resmovits and Saki Knafo
April 9, 2012


Early Education Faces 'Crisis' As Funding Plummets, Report Says

Before Diamande Montague started preschool, she was the kind of kid who clung to her mother's skirt. When she and her mom went outside and other kids gravitated to each other, she'd hover close to mom. If they were in a doctor's office with a play area and the other kids were helping themselves to books and blocks, Diamande wouldn't join them.

Besides being shy, she had a speech delay. But two years later, her mother said, Diamande talks "mucho mucho mucho." She's learning the alphabet and can spell her name.

Diamanda's mother, Saran Dore, who lives in the Bronx and sends her daughter to a preschool program administered by the New York City-based non-profit Children's Aid Society, is one of many low-income parents who say early education has made a difference in their children's lives.

U.S. News
By: Meg Handley
April 9, 2012

Rising rents, interest rates could push more Americans to buy homes

Buoyed by several months of encouraging housing data, an increasing number of economists and industry experts are sticking their necks out to say that this year's housing market is going to be different.

Besides the obvious improvement in the labor market, "there are some fundamental things that are shifting in the real estate space that bode well for the balance of the year," says Budge Huskey, president and chief operating officer of Coldwell Banker Real Estate. "We've had several straight months of positive housing data [that's] really been in line with the more positive economic data. They are going in lockstep."

Concord Monitor
By: Craig Welch
April 9, 2012

In 100 parks, renters have become owners

People from more than 5,600 New Hampshire households, most of them low-income, have created affordable housing for themselves. Quite an accomplishment, wouldn't you say?

TIME
By: Roger W. Ferguson
April 9, 2012

Op-Ed: improving financial literacy is essential to our nation's economic health

April has been designated National Financial Literacy Month, so now is a good time to reflect on the importance of financial literacy and its impact on our nation's future financial health. Many Americans still need better resources and targeted education to help them understand the most important issues affecting their finances. Schools, families, governments, and financial institutions must all play a role in promoting financial literacy if our nation is to return to financial health.

The New York Times
By: Jessica Silver-Greenberg
April 10, 2012

Lenders again dealing credit to risky clients

Annette Alejandro just emerged from bankruptcy and doesn't have a job, and her car was repossessed last year. Still, after spending her days job hunting, she returns to her apartment in Brooklyn where, in disbelief, she sorts through the piles of credit card and auto loan offers that have come in the mail.

"Even I wouldn't make a loan to me at this point," Ms. Alejandro said.

In the depths of the financial crisis, borrowers with tarnished credit like Ms. Alejandro were almost entirely shut out by traditional lenders. It was hard enough for people with stellar credit to get loans.

The Huffington Post
By: Bonnie Kavoussi
April 10, 2012

Few Americans are confident in their ability to retire: study

For most Americans, retirement is more fantasy than reality.

Just 14 percent of Americans say they are very confident in their ability to retire comfortably. That's near the record low of 13 percent in 2009 and 2011, according to a study by the Employee Benefit Research Institute released in March.

Daily Yonder
By: Craig Shroeder
March 20, 2012

Wise Towns Will Spur Young Entrepreneurs

Jordan Keck, 17, of rural Lincoln County, Oregon, took part in a Young Entrepreneurs Business Week, a summer conference where high school students competed to run a small business. Summer programs like this give business-minded teenagers experience and confidence.

In community after community, asking rural young people if they plan to live in their hometowns in the future meets with lukewarm responses. But, when the question is changed, to ask how many youth would like to stay or return if there were quality career opportunities available, well over half shoot their hands into the air.

Clearly, it is the perceived lack of careers that is causing many rural youth to believe that they must leave their hometowns and never return.

The Atlantic
By: Karl Smith
April 9, 2012

If Americans save, who will borrow? (Part II)

In my first installment I tried to make the point that the range of investment opportunities is limited. If the whole world tries to save at once we very quickly run into investments that have very low returns or alternatively are very risky.

Nonetheless, readers might understandably object that even a very low rate of return is better than becoming ever deeper in debt as America has of late.

That depends. The type of debt really matters.

The Huffington Post
April 9, 2012

Colorado Senate passes ASSET Bill: Senate Bill 15 would give undocumented immigrant students lower college tuition rates

A bill that would provide more affordable tuition rates -- rates closer to an in-state level, rather than the higher out-of-state level -- to Colorado's undocumented immigrant students was approved by the Colorado Senate on Monday.

The Huffington Post
By: Raul Gonzalez
April 9, 2012

Was Rick Santorum right about college?

No, of course not. When Senator Santorum said that President Obama is a snob for suggesting that more Americans should get a college education, he was clearly wrong. If we're going to compete globally, more of us need to go to college. Americans with a college degree are less likely to be unemployed today than those with just a high school diploma. Today's manufacturing jobs require higher-level skills than those of previous generations. Clearly, a college degree is an advantage -- for those who can afford it. The problem is not that college is for "snobs," but that access to college is increasingly reserved for the most affluent among us.

The Huffington Post
By Ben Hallman
April 9, 2012

Wells Fargo slapped with $3.1 million fine for 'reprehensible' handling of one mortgage

A federal judge who has fiercely criticized how big banks service home loans is fed up with Wells Fargo.

In a scathing opinion issued last week, Elizabeth Magner, a federal bankruptcy judge in the Eastern District of Louisiana, characterized as "highly reprehensible" Wells Fargo's behavior over more than five years of litigation with a single homeowner and ordered the bank to pay the New Orleans man a whopping $3.1 million in punitive damages, one of the biggest fines ever for mortgage servicing misconduct.

"Wells Fargo has taken advantage of borrowers who rely on it to accurately apply payments and calculate the amounts owed," Magner writes. "But perhaps more disturbing is Wells Fargo's refusal to voluntarily correct its errors. It prefers to rely on the ignorance of borrowers or their inability to fund a challenge to its demands, rather than voluntarily relinquish gains obtained through improper accounting methods."

The Huffington Post
By: Zach Carter and Ryan Grim
April 5, 2012


Obama JOBS Act leaves labor fuming in democratic feud

WASHINGTON -- President Barack Obama will sign the JOBS Act into law Thursday, clinching a rare and hard-fought bipartisan victory for his presidency. But to secure the legislative win, he had to pick sides in a simmering feud between interest groups aligned with the Democratic Party. One side of the fight -- the tech industry and venture capital allies -- is all smiles. But the other side -- organized labor -- is seething.

The Huffington Post
By: Mariam Wright Edelman
April 6, 2012

America's public schools: still unequal and unjust

Millions of children in America are denied the opportunity to receive a fair and high quality education. In March, the U.S. Department of Education released new information showing that children of color face harsher discipline, have less access to rigorous course offerings, and are more often taught by lower paid and less experienced teachers.

The Huffington Post
By: Joel John Roberts
April 8, 2012

Will California Act to Create More Affordable Housing?

California's state leaders are debating whether they should tax homebuyers in order to fund more affordable housing for those who struggle with renting a house, let alone buying one.

The Huffington Post
By: Frank A. Weil
April 5, 2012

The 'JOBS Act' Is a Fraud on America

Who in their right mind could vote against a bill in Congress entitled the "JOBS Act"? The answer obviously is very few members of either house.

How many of those who voted for it knew what was in it? And how many of those who read it connected its provisions to the lessons of the last decade? The answer must be very few.

Critical provisions in the law remove SEC oversight and other obstacles to raising up to $50 million for small businesses. That is tantamount to putting up a sign saying "Swindlers Welcome."

Everyone is properly in favor of more jobs. Apparently there are some, however, who think that more capital in the hands of smaller businesses automatically translates into more jobs. How many such jobs are likely to result and how likely are they to be good, long-term jobs?

How soon and fast we forget! Madoff raked in somewhere between $20 and $60 billion and perhaps created 20 jobs.

The core of this new cynically and cleverly named Jobs Act is to remove obstacles to securing capital for smaller business. The idea is shameless.

The result will be like the last decade and the abuses in the housing finance markets.

In addition to a few legitimate practitioners, there will be open hunting season for every clever peddler of phony securities. The absolutely predictable result will be, a few years out, a major rash of fraud. Only this time it won't be the big banks -- it will be down-market bucket shops.

The president is being sold the Brooklyn Bridge to Hell. If that bill becomes law, it will be Obama's biggest mistake of his presidency.

If Congress wants to pass it over his veto, it will be entirely their fault. The only good that could come of that would be a crisis that could be big enough to really address the basic problems in our political system.

The Progressive Pulse (CFED)
April 5, 2012

Asset poverty in NC: an important dimension of household economic security

Economic security throughout the life course is linked to income and asset ownership. Households that are poor or low-income have a hard time building assets and, as a result, face a significant barrier to long-term financial stability. According to a recent report by the Corporation for Enterprise Development (CFED), asset poverty is on the rise in North Carolina.

The Huffington Post
By: Rahilla Zafar
April 5, 2012

Teaching Entrepreneurship in inner-city schools

Seventeen year old inner city high school student Maurice Suggs enjoys learning. A student at University City High School in Philadelphia, he is part of a team of a dozen students led by Wharton Business School Professor Keith Weigelt developing a product that currently doesn't exist, an online business curriculum that will be sold to high schools across the country.

The Huffington Post
By: AnnaMaria Andriotis
April 4, 2012

Student loan debit card encourages indebted graduates to shop

College graduates can now pay off their student loans by paying their bar tabs. That's the marketing pitch for a debit card aimed at those saddled with loan debt.

But borrowers should tread lightly: They'll have to spend a lot on clothing and nightlife before seeing any meaningful rewards, experts say. They also may incur high fees.

The Atlantic
By: Karl Smith
April 5, 2012

If Americans start saving, who will borrow?

Americans live beyond their means. This is the conventional wisdom among American elites from Washington to Wall Street to Harvard Yard. Our government budget deficit is out of control. Consumer debt is rising and we are living through the aftershock of a rapacious run-up in mortgage debt. When will we ever learn?

This conventional wisdom, however, is missing one seemingly obvious but systemically overlooked stumbling block: If Americans start saving, who will borrow?

TIME
By: Scott Gerber
April 6, 2012


The JOBS Act signing: a giant step for entrepreneurship in America

At the White House yesterday, I had the pleasure of watching one of the most forward-thinking pieces of pro-business bipartisan legislation to date signed into law by President Obama: the Jumpstart Our Business Startups (JOBS) Act.

The Wall Street Journal
By: Phil Gramm and Steve McMillin
April 5, 2012

Gramm and McMillin: the real cause of income inequality

In the stagnant days of the Carter administration, when inflation was approaching 13.5% and interest rates were peaking at 21.5%, income was more evenly distributed than in any period in 20th-century America. Since the days of that equality in misery, the measured income of the top 1% of income tax filers has risen over three and a half times as fast as the income of the population as a whole.

Fox News (CFED)
April 5, 2012

Average Minnesotan has $10,355 in credit card debt

MINNEAPOLIS (FOX 9) - Minnesotans have an average of $10,355 in credit card debt, according to research from the Washington nonprofit Corporation for Enterprise Development.

Kasey Wiedrich, senior program manager for applied research at CFED, said Minnesotans are in the middle of the pack in terms of overall credit card debt when compared to other states.

The Huffington Post
By: Alexander Eichler
April 4, 2012

Payday lenders tied to native Americans not above law, feds say

Lately, payday lenders have been linking up with Native American tribes as a way to sidestep U.S. law.

Federal authorities seem less and less willing to let it slide.

NPR
By: Claudio Sanchez
April 3, 2012

Under scrutiny, some Head Start programs in limbo

The Obama administration is calling for major changes in Head Start, the 46-year-old early childhood education program that helped launch President Johnson's War on Poverty.

Entrepreneurial insights

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TIME
By: Anita Hamilton
March 30, 2012

Entrepreneurial insights

When Hurricane Katrina devastated New Orleans and much of the surrounding Gulf Coast in 2005, some of the more dire observers suggested that the blighted city might not even be worth rebuilding. "Only a sadist would insist on resurrecting this concentration of poverty, crime, and deplorable schools," wrote Slate's Jack Shafer, a week after the hurricane hit Southeast Louisiana.

Nearly seven years later, not only is New Orleans' population back on the rise, but the state is aggressively courting small businesses with generous tax credits that effectively refund up to 40% of their startup costs. While Louisiana's recovery is by no means complete -- it's still one of the poorest states in the nation and New Orleans' Lower Ninth Ward remains a ghost town -- a new culture of entrepreneurship is taking root not just in the Crescent City, but in other urban pockets around the state as well. "For people who want to be a part of building something, there is absolutely no better place to be," says Taylor Beery, a New Orleans native who launched his group decision-making startup, VoteIt, in March 2011, and has raised $800,000 in funding since then.

TIME
By: Andrew J. Rotherham
April 5, 2012

Are pre-k programs about to get gutted?

When a little girl, who I'll call Tina, arrived in a pre-kindergarten program in Washington, D.C. she was unable to recognize any sounds or letters. By the time she left for kindergarten she knew all her letters and more sounds than D.C.'s standards require. Now, six years later, Tina's teachers say she's "on a roll" in school.

The Wall Street Journal
By: David Wessel
April 4, 2012

Bank balance: regulation and innovation

The first phase of global governments' response to the financial crisis was containing the damage and preventing economic disaster.

The second phase--"never again"--was an attempt to reduce the odds of a repeat. In this phase, which arrived surprisingly quickly, Congress rewrote the rules of finance in the Dodd-Frank Act. Global financial regulators who gather in Basel, Switzerland, agreed to force banks to build bigger capital cushions to absorb losses and keep more of their money in easily sold liquid assets.

States News Service
April 4, 2012

ACF awards over $3.9 million for individual development account projects

The following information was released by the Administration for Children and Families (ACF):

The Office of Community Services has awarded 18 Assets for Independence (AFI) grants totaling more than $3.9 million to community-based organizations and government agencies under HHS Administration for Children and Families. Funded projects will provide low-income individuals and families with access to Individual Development Accounts (IDAs) as well as training on financial education.

The New York Times
By: Mark Landler
April 3, 2012

Obama, in talk, calls House G.O.P. budget the work of rightist radicals

President Obama opened a full-frontal assault on Tuesday on the federal budget adopted by House Republicans, condemning it as a "Trojan horse" that would greatly deepen inequality in the United States, and painting it as the manifesto of a party that has swung radically to the right.

The Stolen Dreams Act

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The Huffington Post
By: Rep. Luis Gutierrez (D-IL)
April 2, 2012

The Stolen Dreams Act

Word is leaking from the Senate that Republicans, facing stiff and well-deserved opposition from most Hispanic voters, are crafting a bill similar to but not nearly as good as the DREAM Act, a bill to legalize the immigration status of young people who grew up in the United States but are currently undocumented immigrants.

TIME
By: Gary Belsky and Tom Gilovich
April 3, 2012

What class divide? Rich and poor, red and blue agree on wealth distribution

What's an acceptable level of income inequality in America? Is the current situation far too unfair, as many who lean to the political left maintain? Would ending tax breaks for people earning more than $250,000 a year constitute "class warfare," as many on the political right contend? Complex questions, to be sure. But some surprising insight into these issues comes from a remarkable recent study by Michael Norton of the Harvard Business School and Dan Ariely of Duke University. You might be surprised by the results, whatever your political persuasion or net worth. Norton and Ariely were motivated by a simple but noble idea. As they explain:

The Atlantic
By: Derek Thompson
March 30, 2012

Paul Ryan loves class warfare, and so do the Democrats

Here is everything you need to know about how serious Washington is about the deficit. This week, 100 Democrats voted for a bill that raised $4 trillion in taxes mostly from banks and millionaires; 300 Republicans voted for a bill that cut $3 trillion from low-income programs; and not even 40 people voted for a bill that both raised taxes and cut spending in a balanced manner. Who's afraid of a little class warfare? Not this Congress!

Why people hate the banks

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The New York Times
By: Joe Nocera
April 2, 2012

Why people hate the banks

A few months ago, I was standing in a crowded elevator when Jamie Dimon, the chief executive of JPMorgan Chase, stepped in. When he saw me, he said in a voice loud enough for everyone to hear: "Why does The New York Times hate the banks?"

Another hole in the safety net

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The New York Times
April 2, 2012

Another hole in the safety net

Georgia is vying with Florida for the title of stingiest state, when it comes to jobless residents. The Republican-controlled State Legislature passed a bill last week to cut the duration of unemployment benefits from a current maximum of 26 weeks to a range from 14 weeks to 20 weeks, depending on the state unemployment rate. Florida cut its 26-week maximum last year, to a range of 12 weeks to 23 weeks.

The New York Times
By: Sabrina Tavernise
April 3, 2012

Longevity up in U.S., but education creates disparity, study says

Americans are living longer, but the gains in life span are accruing disproportionately among the better educated, according to a new report by researchers from the University of Wisconsin.

Targeted News Service
By: Ramesh Negi
April 3, 2012

$15 million funding available for Assets for Independence demonstration program

The U.S. Health and Human Services Department's Administration for Children and Families has announced that it expects to award a maximum of 50 discretionary grants for administering projects for the national Assets for Independence demonstration of the use and impact of Individual Development Accounts and related services.

Stanford Social Innovation Review (CFED)
By: Bhagwan Chowdry
Spring 2012

Can financial citizenship begin at birth?

Nearly half of the world's adult population has no access to basic financial services. Poor women in India and Africa even pay deposit collectors to keep their modest savings safe. Meanwhile, more than half of all births in most developing countries go unrecorded. Unregistered children are likely to be among the poorest and most socially marginalized members of society. And those without legal identity have difficulty obtaining essential services, including bank accounts. Further, when natural disasters and conflicts leave many homeless and without critical supplies, attempts to distribute water, food, and medicine are often compromised by corruption, inefficient distribution, and an inability to identify recipients.

They just don't get it

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The Huffington Post
By: Rep. David Cicilline (D-RI)
March 30, 2012

They just don't get it

Yesterday, less than a year after a similar proposal was defeated, the House Republican leadership held a vote on a budget proposal that would extend tax cuts for the wealthiest Americans, make deep cuts to programs that serve middle class families and end the Medicare guarantee for our seniors.

The Huffington Post
By: Rep Steny Hoyer (D-MD)
March 30, 2012

Republican budget represents a bleak future for America

This week the House voted on budget proposals for Fiscal Year 2013. The Republican budget, put forward by Budget Committee Chairman Paul Ryan, was presented as "a choice between two futures" that would show a stark contrast between their priorities and those of Democrats.

Too Much
By: Sam Pizzigati
March 30, 2012

Another home run for the walloping wealthy

The Los Angeles Dodgers didn't win all that many baseball games in the eight years owner Frank McCourt signed the team's player paychecks. But McCourt has now won plenty. The mega-rich developer has emerged as the biggest financial winner in the history of professional sports.

The Huffington Post
By: Jared Bernstein
March 30, 2012

The myth of the myth of the disappearing middle class

Brookings economist Ron Haskins puts a hurt on some numbers in this AM's Washington Post.

His piece has two parts. The first part, discussed below, has a pretty fat thumb on the scale. The second is about how decisions regarding marriage and the pursuit of higher education can have a profound effect on a person and family's economic success. I'll leave that for now, though I should say that while I don't often agree with him, Ron's done solid, thoughtful work on those important issues.

The Washington Post
By: Ylan Q. Mui
April 1, 2012

Senior citizens continue to bear burden of student loans

The burden of paying for college is wreaking havoc on the finances of an unexpected demographic: senior citizens.

Pink slime economics

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The New York Times
By: Paul Krugman
April 1, 2012

Pink slime economics

The big bad event of last week was, of course, the Supreme Court hearing on health reform. In the course of that hearing it became clear that several of the justices, and possibly a majority, are political creatures pure and simple, willing to embrace any argument, no matter how absurd, that serves the interests of Team Republican.

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