February 2013 Archives

The Washington Post
By:  Michael Fletcher
February 27, 2013

The large and growing wealth gap separating white and black families is the product of stubborn barriers that disproportionately consign African Americans to less-valuable real estate and lower-paying jobs, according to a new study.

The New York Times
By:  Jessica Silver-Greenberg
February 26, 2013

Jamie Dimon, the chief executive of JPMorgan Chase, vowed on Tuesday to change how the bank deals with Internet-based payday lenders that automatically withdraw payments from borrowers' checking accounts.

What Mortgage Relief?

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The New York Times
By:  Editorial
February 24, 2013

A year ago, when the nation's biggest banks settled with state and federal officials over claims of foreclosure abuses, the public was led to believe that the deal would allow millions of hard-pressed borrowers to escape the threat of foreclosure. It still hasn't happened.

Americans Anxious About Retirement

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The Washington Post
By:  Michael Fletcher
February 25, 2013

Even as the economy slowly improves, the vast majority of Americans remain deeply worried about their ability to achieve a secure retirement, according to a new survey.

Mortgage Regulation Is Only Skin Deep

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The Wall Street Journal
By:  David Reilly
February 22, 2013

Housing markets are healing, but they are far from recovered.

So regulators, who have tightened the screws on a lending system that had run amok, are thinking about easing up. The danger is that by trying to add more fuel to housing's revival, they could again sow the seed for long-run problems.

American Banker
By:  Jeff Horwitz
February 26, 2013

As the overseer of mortgage giants Fannie Mae and Freddie Mac, the Federal Housing Finance Agency has a duty to safeguard taxpayer dollars. But the regulator may have done just the opposite earlier this month.

The New York Times
By:  Jessica Silver-Greenberg
February 23, 2013

Major banks have quickly become behind-the-scenes allies of Internet-based payday lenders that offer short-term loans with interest rates sometimes exceeding 500 percent.

Less Innovation, More Inequality

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The New York Times
By:  Edmund S. Phelps
February 24, 2013

ONE source of the outsize inequalities in America is the dynamism that made economic activity so rewarding. An economy open to new concepts and novel ventures is bound to generate unequal gains. To tax all of those gains would close off the prospects for success that many entrepreneurs need if they are to undertake ambitious ventures -- a big mistake. But it would also be a mistake to misunderstand the relation of inequality and innovation. It is less innovation -- not more -- that has widened inequality in the United States in recent decades.

Making Ends Meet on the Minimum Wage

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The Washington Post
By:  Michael Laris
February 24, 2013

Tyrrell Brown is constantly thinking about money.

"All the time, every day, right now," said Brown, 24.

He makes minimum wage as a cashier at the Family Dollar in Forest Heights, in Prince George's County near the District boundary. He pulls out his phone for an accounting of his weekly take-home pay: $176.63, $187.95, $252.42, $229.99.

Bloomberg
By:  The Editors
February 24, 2013

U.S. President Barack Obama is seeking to resurrect an idea that he set aside during his first term: Raise the minimum wage to help lift working families out of poverty. The proposal, which would take the minimum to $9 an hour from the current $7.25, is far from ideal. Still, it's the right thing to do.

Jobless Claims Increase

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The Wall Street Journal
By:  Jeffrey Sparshott and Eric Morath
February 21, 2013

WASHINGTON--The number of U.S. workers filing new applications for unemployment benefits jumped last week, a reminder of the labor market's slow recovery.

The New York Times
By:  Binyamin Appelbaum
February 21, 2013

WASHINGTON -- There are widening divisions among officials of the Federal Reserve over the value of its efforts to reduce unemployment, but the authors of its bond-buying policy remain firmly in control, according to an official account of the January meeting of the Fed's policy-making committee.

The Washington Post
By:  Lyndsey Layton
February 19, 2013

The nation must act urgently to close the achievement gap between poor and privileged children by changing the way public schools are financed, improving teacher quality, investing in early-childhood education and demanding greater accountability down to the local school board level, according to a report issued Tuesday by an expert panel.

Forbes
By:  Amy Rosen
February 19, 2013

More than two years ago, I had the privilege of being asked by President Obama to serve as the Vice Chair on the President's Advisory Council on Financial Capability and to chair its youth sub-committee. Today, Chairman Rogers and I were proud to present the Council's findings to the President.

The Atlanta Journal-Constitution
By:  Jennifer Brooks
February 20, 2013

The recession's lingering effects have taken an enormous toll on Georgia families. A report released last month by my organization, the Corporation for Enterprise Development, revealed more than half --- 56 percent --- of the state's residents are living on the edge of financial collapse. They have little savings to fall back on in the event of a job loss, health crisis or other emergency.

The Real Problem with the Big Banks

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The New Yorker
By:  James Surowiecki
February 19, 2013

Ask what's wrong with America's banks, and you're likely to hear that they're just too complicated, too opaque. Banks are doing too much trading and not enough traditional lending, and their speculation with complicated financial instruments (like the ones that led to J. P. Morgan losing six billion dollars with its "whale" trade last year) is a recipe for disaster, with the financial crisis of 2007-2008 seen as proof positive of the dangers of too much complexity and too little disclosure. (Thus Jesse Eisinger and Frank Partnoy argue in last month's Atlantic that the panic of 2008 resulted "from a lack of transparency.") And so we get calls for banks to simplify their operations--to go back to what's often called "plain vanilla" banking--and to disclose more about what they're doing. This quest for simplicity and transparency is understandable in a world of collateralized-debt obligations and endlessly proliferating derivatives. But it doesn't actually get at the heart of the issue. The fundamental problem with the banks isn't that they look (and act) more and more like hedge funds. The fundamental problem with banks is what it's always been: they're in the business of banking, and banking, whether plain vanilla or incredibly sophisticated, is inherently risky.

The Fiscal Times
By:  Josh Boak
February 20, 2013

No group gets as much lip service from President Obama and congressional Republicans than the middle class. They get treated reverentially much like the bald eagle did a few decades ago--a source of American pride on the verge of extinction.

Forbes
By:  Michael Zakaras
February 20, 2013

As we struggle through this recession, it's not surprising we are focusing on the unemployment rate, which is still hovering around eight percent. But we mustn't ignore two other problems that are less visible but arguably more dangerous over the long-term: financial illiteracy and insecurity.

The New York Times
By:  Annie Lowrey
February 15, 2013

Incomes rose more than 11 percent for the top 1 percent of earners during the economic recovery, but not at all for everybody else, according to new data.

Better Than Minimum Wage

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The Washington Post
By:  Charles Lane
February 19, 2013

Liberal firebrand Paul Krugman backs President Obama's plan for a phased-in 25 percent increase in the minimum wage, to $9 per hour. But he is still economist enough to note that raising it to $20 "would create a lot of problems" - among them, presumably, pricing low-skilled workers out of the job market.

A Poor Solution

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Reuters
By:  Reihan Salam
February 15, 2013

The minimum wage debate is back, thanks to President Barack Obama. In his State of the Union address this week, he noted that a full-time worker earning the federal minimum wage of $7.25 an hour would earn $14,500 a year. This is an amount that would be very low for a single adult living alone, let alone the parent with two children whom the president invoked in his speech. And so he called for a sharp increase in the federal minimum wage from $7.25 an hour to $9 an hour, an amount that would be indexed to inflation, as a way to fight poverty and to give the economy a boost.

The Washington Post
By:  Zachary A. Goldfarb
February 19, 2013

President Obama injected fresh urgency Tuesday morning into discussions over how to avoid deep, automatic cuts to domestic and defense spending that are set to take effect in 10 days.

The Fiscal Times 
By:  Steve Yoder
February 12, 2013

When Sally Herigstad and her husband wanted to buy a house recently in their Seattle suburb, they ran into some unfriendly numbers. They owe the bank about $360,000 on their existing home, but a sale would bring in only the low to mid-$300's:  they'd have to close the deal with a big check. So the couple went ahead and bought the house they wanted--and then rented the first. Still, Sally finds being a landlord a hassle. "If I could sell it and get my money out, I'd do it today," she says of the first home.

The Washington Post
By:  Jim Tankersley
February 13, 2013

Two kinds of middle-class Americans are struggling today -- people who can't find any work or enough work, and full-timers who can't seem to get ahead.

Forbes
By:  Bryce Covert
February 13, 2013

I was surprised to be surprised by a big policy proposed in President Obama's State of the Union address last night: universal preschool. He declared, simply and directly, "Tonight, I propose working with states to make high-quality preschool available to every child in America." This is huge. Universal access to preschool would undoubtedly, as he noted, be hugely important for the nation's children. But he didn't mention another group who would see it as an enormous financial boon: working parents. In fact, while we desperately need universal access to quality early childhood education, we also need to guarantee universal access to quality childcare at all ages. 

Obama's 'war on inequality'

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Reuters
By:  David Rhode
February 14, 2013

He quoted Jack Kennedy but sounded more like Lyndon Johnson.

In an audacious State of the Union address Tuesday, President Barack Obama made sweeping proposals to reduce poverty, revive the middle class and increase taxes on the "well off." While careful to not declare it outright, an emboldened second-term president laid out an agenda that could be called a "war on inequality."

The New York Times
By:  Mark Landler
February 13, 2013

WASHINGTON -- President Obama, seeking to put the prosperity and promise of the middle class at the heart of his second-term agenda, called on Congress on Tuesday night to raise the federal minimum wage to $9 an hour, saying that would lift millions out of poverty and energize the economy.

The Washington Post
By:  Scott Wilson
February 13, 2013

President Obama challenged Congress on Tuesday night to assist an American middle class squeezed by rising costs and stagnant wages, making clear that he will devote much of his second term to closing the income gap between rich and poor.

The Wall Street Journal
By:  Nick Timiraos
February 11, 2013

U.S. housing markets finally are improving, but taxpayers may not be off the hook yet.

The Federal Housing Administration, a significant backer of new mortgage lending over the past five years, is facing billions of dollars in potential losses, as many loans that it guaranteed during the recession have soured. The agency's independent audit last fall showed that at its current pace, the FHA would exhaust its reserves and need $16 billion from the U.S. government to cover projected losses.

Bloomberg
By:  Peter Orszag
February 12, 2013

As the U.S. population ages, and with the effects of the financial crisis promising to linger for some time, economic growth will be lower than we would like. This is why the federal government needs to do more to help Americans earn college degrees.

The Wall Street Journal
By:  Ruth Simon and Michael Corkery
February 11, 2013

U.S. and state officials are intensifying efforts to hold colleges accountable for what happens after graduation, a sign of frustration with sky-high tuition costs and student-loan debt.

The Washington Post
By:  Pedro da Costa and Jason Lange
February 11, 2013

The Federal Reserve's aggressive easing of monetary policy is warranted given the still-battered state of the U.S. labor market, Fed Vice Chairman Janet L. Yellen said Monday.

The Urban Institute:  Metro Trends Blog
By:  Sara Edelstein
February 8, 2013

If you were to spend a day in McAllen, Texas, every other child you saw would be living in poverty. The McAllen metropolitan area's child poverty rate is an astounding 47 percent--and unfortunately, it is not alone in having a troublingly high rate of poverty.

NPR
By:  Ailsa Chang
February 12, 2013

Jack Lew, the man President Obama has chosen to help oversee the country's biggest banks, has said it plainly -- he's no expert on banking. Lew said as much when the Senate was vetting him to head the White House Office of Management and Budget in 2010.
The New York Times
By:  Nelson D. Schwartz
February 8, 2013

Jack Andrews and his wife no longer enjoy what they call date night, their once-a-month outing to the movies and a steak dinner at Logan's Roadhouse in Augusta, Ga. In Harlem, Eddie Phillips's life insurance payment will have to wait a few more weeks. And Jessica Price is buying cheaper food near her home in Orlando, Fla., even though she worries it may not be as healthy.

A Start-Up Epidemic Spreads Inland

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The Washington Post
By:  J.D. Harrison
February 8, 2013

Dozens of entrepreneurs and investors gathered at the White House this week to update administration officials on the progress of start-up ecosystems in their hometowns and pitch policy recommendations for the coming year.

The Huffington Post
By:  John Hope Bryant
February 8, 2013

As we reflect this year on the 84th birthday of Dr. Martin Luther King, Jr., and the 50th anniversary of the "I Have A Dream" speech, I think about the vast unfinished agenda of Dr. King, launched as the third phase of his vision for a world better. Dr. King had focused first on social justice, then on ending war, and his last and final work was focused on poverty.

The Charlotte Observer
By:  Kenneth Harney
February 8, 2013

If you want to buy a house with minimal cash by using an FHA-insured mortgage, here's some sobering news: Thanks to an ongoing series of fee increases and underwriting tweaks - the most recent of which were announced Jan. 31 - FHA is getting steadily more expensive, and may not work for you.

The New York Times
By:  Jessica Silver-Greenberg
February 7, 2013

When an outside analysis uncovered serious flaws with thousands of home loans, JPMorgan Chase executives found an easy fix.

Bloomberg
By:  Cheyenne Hopkins
February 7, 2013

A court ruling last month cast doubt on the legality of the fledging U.S. consumer bureau and its director. Ever since, opponents have expressed hope that Senator Elizabeth Warren -- the agency's most ardent champion -- might agree to trim its powers in return for its survival.

The Washington Post
By:  Michael A. Fletcher and Peyton M. Craighill
February 6, 2013

Americans remain deeply pessimistic about the nation's economic future nearly four years into the recovery, and the vast majority think it will take "many years" for things to return to the way they were before the downturn, according to a poll released Thursday.

Is Your 401(k) Obsolete?

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Washington Monthly:  Ten Miles Square
By:  Anne Kim
February 7, 2013

New research by the firm HelloWallet finds that more than a quarter of Americans who have an employer-sponsored retirement plan are raiding these accounts for other uses.

The Monroe Evening News (Michigan; CFED)
By:  Paula Wethington
February 5, 2013

Even those who are living on the tightest of budgets need to build up nest eggs.

That's one of the messages that the Corporation for Enterprise Development has in a report of its state-by-state scorecard that shows how Americans are doing in terms of financial security.

Atlanticville (Long Branch, New Jersey)
By:  Nicole Antonucci
February 7, 2013

EATONTOWN -- Manufactured homes are being readied at Pine Tree Mobile Home Park in Eatontown for residents displaced by Sandy who are still in need of temporary or permanent housing.

The New York Times
By:  Catherine Rampell
February 3, 2013

Young graduates are in debt, out of work and on their parents' couches. People in their 30s and 40s can't afford to buy homes or have children. Retirees are earning near-zero interest on their savings.

The Washington Post
By:  Michael A. Fletcher
February 2, 2013

Scholars gathered for the African American Economic Summit at Howard University on Friday sketched an alarming picture of the financial ills afflicting the black community even as the nation recovers from the recession.

'Luxurious' Mobile Homes?

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The Wall Street Journal
By:  June Fletcher
February 1, 2013

Q. My husband is retired and I am about to retire. To save money after we sell our house here, he is interested in moving into a luxury mobile home community in Florida. I have never lived in a mobile home and don't believe that they are that luxurious. What do you think?

The Huffington Post
By:  Dedrick Muhammad
February 1, 2013

If you've made financial savings a New Year's resolution, you're not alone. A recently released report by nonprofit organization Corporation for Enterprise Development finds that nearly 45 percent of Americans lack enough savings to cover three months' worth of living expenses -- meaning half of America currently lives in what financial experts call "liquid asset poverty." In practical terms, these households lack sufficient funds to weather through an emergency.

Lawrence Journal World (Lawrence, Kansas)
By:  Matt Erickson
February 2, 2013

Skyrocketing student-loan debt in recent years has left college graduates saddled with huge financial burdens, convinced other students to drop out and scared some young people away from college completely.

The Washington Post
By:  Neil Irwin
February 1, 2013

The economy began the year with solid job creation, and the labor market was much stronger at the end of 2012 than previously thought, according to new data out Friday that indicated surprising momentum in the economy in the new year.

My Valuable, Cheap College Degree

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The New York Times
By:  Arthur C. Brooks
February 1, 2013

MUCH is being written about the preposterously high cost of college. The median inflation-adjusted household income fell by 7 percent between 2006 and 2011, while the average real tuition at public four-year colleges increased over that period by over 18 percent. Meanwhile, the average tuition for just one year at a four-year private university in 2011 was almost $33,000, according to the National Center for Education Statistics. College tuition has increased at twice the rate of health care costs over the past 25 years.

The Wall Street Journal
By:  Carolyn T. Geer
January 20, 2013

It's time to rethink how much you're saving for retirement and how you're saving it.

For one thing, the recent budget deal in Washington (aka the American Taxpayer Relief Act) didn't renew the so-called employee payroll-tax holiday. That means higher Social Security payroll taxes--and smaller paychecks--for nearly all wage earners.

Money News
By:  John Morgan
February 1, 2013

Almost half of U.S. households are living on the brink of financial disaster, with almost no savings to rely on in the event of job loss, health crisis or other emergency, according to an annual survey of Americans' ability to save money.

Public News Service (Little Rock, Arkansas)
By:  Chris Thomas
January 31, 2013

More than half of Arkansas residents do not have enough savings to keep them afloat for three months in case of a job loss or other costly emergency - and even those at higher incomes are not immune. That's one finding of a new report that makes recommendations about what states can do to improve families' financial stability. 

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