Wanted (sorta): Summer jobs for teens

USA Today‘s Brittany Hargrave quotes Diana Carew on the teen unemployment rate:

Teen unemployment was 24.5% last month, more than triple the national jobless rate of 7.6%, the Bureau of Labor Statistics reports.

Those unemployment rates reflect only those people who are actively looking for work, not those who have given up or never looked in the first place.

Joblessness among teens 6-19 traditionally is far greater than the national average, but their current unemployment rate is “really high,” said Diana Carew, an economist for the Progressive Policy Institute, a Washington, D.C.-based think tank.

Employment rates for teens “started to drop precipitously” in 2000, Carew said. “Then the recession exacerbated the trend,” she said.

Read the entire article here.

The History of Gubernatorial Senate Appointments

Including yesterday’s appointment of Jeffrey Chiesa, there have been 21 gubernatorial appointments to fill U.S. Senate seats since 1993 — nine resulting from deaths and 12 from resignations. So how does the New Jerseyan fit into the overall pattern?

In 18 of the 20 appointments before Chiesa, the newly named Senators were of the same party as their predecessors. So replacing an archliberal Democrat with a self-described conservative Republican, as is happening in New Jersey, is a real break in usual practice.

However, this is not particularly hard to explain. In only 3 of the 20 cases of vacancies were the Governor and the outgoing Senator of different parties, as with Chris Christie and Frank Lautenberg.

Chiesa fits more comfortably into another emerging pattern: he is a “placeholder” Senator who indicates that he will not run for the seat and who is not really a political figure in his own right. (Although Chiesa was the sitting state Attorney General, New Jersey is one of seven states that fills the AG job by means other than popular election.) Of the 20 other Senators appointed since 1993, seven broadly fit into the placeholder category, with six of these having been appointed just since 2009. Continue reading “The History of Gubernatorial Senate Appointments”

Lautenberg’s Passing Highlights the Strangeness of Gubernatorial Appointments to the Senate

The latest vacancy in the U.S. Senate, created by the death of Senator Frank Lautenberg of New Jersey, is a reminder of a rather obscure centennial that took place last week: the enactment of the 17th Amendment on May 31, 1913 and the peculiar practice of a state-level executive appointing a federal legislator.

Until 1913, all U.S. Senators were appointed by state legislatures, which was part of the Founders’ plan for differentiating the House and the Senate. So whenever a vacancy arose in the Senate due to death or resignation, the state legislature would simply fill the position at its next session. Gubernatorial appointments to vacant seats took place from time to time, but were usually short-term affairs that lasted only until action by the state legislature.

Since enactment of the 17th Amendment, gubernatorial appointments can last much longer – in some cases as long as two years. According to the National Conference of State Legislatures, thirty-six states allow governors to fill vacancies until the next regular election; most of the other 14 allow governors to make interim appointments until a special election. Continue reading “Lautenberg’s Passing Highlights the Strangeness of Gubernatorial Appointments to the Senate”

Wireless Competition Under the Senate’s Microscope

Today the Senate will convene a distinguished panel of experts to discuss the state of wireless competition in America. Although it is trendy among the cognoscenti to complain about the wireless industry, the reality is that wireless competition is vibrant here, and U.S. carriers are leaving their European counterparts in the dust.

A common refrain among those calling for regulators to “level the playing field” is that two carriers—AT&T and Verizon—are running away from the pack, due to their allegedly superior spectrum holdings. The resulting imbalance in competition can be remedied, they claim, by capping the spectrum holdings of the larger carriers and steering newly available spectrum to smaller carriers. Any relative improvement in the smaller carriers’ networks would attract more customers, which would reduce wireless concentration.

One problem with this story is that wireless concentration—a very fuzzy indicator of competition when it comes to wireless services—is not climbing as predicted. In fact, U.S. wireless concentration as measured by the FCC has held steady since 2008, indicating that Sprint and T-Mobile are not losing ground. Indeed, 2012 was a particularly good year for these carriers, as both enjoyed significant subscriber gains. T-Mobile recently completed its merger with MetroPCS, giving the combined company access to more subscribers and more spectrum.

Perhaps the best indicator of the smaller carriers’ prospects is the bidding war for Sprint that has erupted between Softbank and Dish Network. If Sprint stood no chance to compete with AT&T and Verizon due to its allegedly inferior spectrum, then these savvy investors would not be so bullish about Sprint’s future. Put differently, Sprint’s spectrum holdings are valued dearly in the marketplace despite their “high-frequency” nature.

Read the remainder of the article at Forbes.

Already, The Most Unproductive Congress Ever

At the end of 2012, the 112th Congress went down in history as the most unproductive ever. During 2011-2012, Congress passed a mere 283 laws – fewer than a third of the more than 900 laws passed by the “do-nothing Congress” derided by President Harry S Truman in 1948.

The current Congress, however, is already on track to shatter the dubious record set by its predecessor.

Sixty-six days into the current session (Congress is again in recess this week), Congress has passed a whopping … 10 laws. Count them.

And the most recent of these – Public Law 113-10 – was enacted to address this pressing priority: “To specify the size of the precious-metal blanks that will be used in the production of the National Baseball Hall of Fame commemorative coins.”

Even to catch up to last Congress’s legislative output, Congress would need to pass roughly one bill every other day (and with no more breaks for recess).

Continue reading “Already, The Most Unproductive Congress Ever”

Recovering Housing Market Solves Principal Reduction Dilemma

Senate Republicans are drawing a bead on Rep. Mel Watt (D-NC), President Obama’s pick to take over as Director of the Federal Housing Finance Agency(FHFA). A key reason is that Watt supports principal reduction, which is anathema to the GOP. It would be a shame, however, if Watt’s confirmation were scuttled over a dispute that has been overtaken by events. U.S. housing markets have come roaring back to life, and while that’s great news, it has probably closed the window for principal reduction.

During the depths of the housing crisis, many progressives called for reducing the mortgages of homeowners who are “underwater,” meaning they owe more than their house is worth. Conservatives bitterly opposed principal reduction, saying it would reward irresponsible borrowers and expropriate the property of legitimate lenders.

FHFA Director Ed DeMarco, the man Watt has been nominated to replace, resolutely resisted pressure from the Obama administration and Congressional Democrats to use principal reduction remedies on mortgages backed by the two Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac

Recently, the White House announced a two-year extension of their central housing modification program, Home Affordable Modification Program (HAMP). The program differs from the Administrations similarly titled refinancing initiative, Home Affordable Refinancing Program (HARP) in that it allows underwater homeowners structural changes to their loans whereas HARP just lowers the interest rate.

According to a memo circulated by Compass Point Research and Trading,” The extension of the HAMP gives the Obama Administration the necessary optionality to push for principal reduction on GSE-backed mortgages through the HAMP if there is a change in leadership at the Federal Housing Finance Agency (FHFA).”

Download the policy brief.

The Student Debt Problem Is Bigger Than Interest Rates

If you believe the recent blitz of student debt coverage, greedy private lenders  and high interest rates are to blame for the economic woes of recent college  graduates. Lending at what is seen to be excessively high interest rates, the  pressure on private lenders to restructure student loans, even at the expense of  public funds, is rising. At the same time, the government is taking concrete  actions to squeeze private lenders out of the student loan market. Now Sen.  Elizabeth Warren (D-Mass.) has followed in President Obama’s footsteps by  proposing to peg student loan interest rates to the government’s historically  low borrowing costs.

Tempting as it may be, attacking private lenders  alone will not solve the student debt problem. For one, private student loans  are an increasingly small fraction of total outstanding student debt. And while  overall student loan defaults have been rising, private student loan defaults  have been falling. Second, although not innocent, villainizing private lenders  misses the point: outstanding student debt is rising too much too fast. A  government-controlled student loan market will not solve the underlying problem  that recent college graduates are struggling in today’s slow-growth  economy.

Since the 2008 financial crisis, the Department of Education has  essentially taken over the entire student loan market. The federal guarantee  program was scrapped, and interest rates on subsidized Stafford loans were “temporarily” cut in half with another extension debate underway. New government  student loans increased 40 percent over 2008-2012 while new private loans fell  75 percent, to just $6 billion last year. The government now holds more than 85  percent of the $1 trillion in outstanding student debt. Meanwhile, just three  major private lenders remain active in the market. Continue reading “The Student Debt Problem Is Bigger Than Interest Rates”

A Senatorial Centennial: How Congress Was Reshaped 100 Years Ago This Week

If you think that dysfunction and elitism in the U.S. Senate are now at an all-time high, then this is a good time to recall that for the first 12 decades of American history, it was often much worse.

It was on May 31, 1913 — exactly one hundred years ago  — that the 17th Amendment was enacted to shift the election of senators from state legislatures to the voters of each state.  This is a largely forgotten episode of American political history, but its effects still resonate down until today.

The original design of Congress only envisioned U.S. Representatives as directly representing the people. Members of the upper house were seen to represent the states and to give them a powerful influence on national domestic politics, and also on the ratification of international treaties.  After the Civil War, Populists began calling for the Senate to be more directly representative of the people.

By the Progressive Era of the early 20th century, other problems had also crept in. State legislatures with chambers under the control of different parties sometimes could not agree on a Senate choice, leaving the seat vacant. These deadlocks were all too often broken through corruption and backroom dealing by party bosses, some of the same concerns that also led progressives to champion the introduction of primary elections.

Continue reading “A Senatorial Centennial: How Congress Was Reshaped 100 Years Ago This Week”

More Good News for Housing

As the New York Times reported yesterday, the housing market is recovering, consumer confidence is at a five-year high and the market is in the midst of a strong recoveryThe housing market is enjoying sustained momentum alongside record highs in the stock market, and is leading the broader recovery. Fannie Mae and Freddie Mac (GSEs) are making money-lots of it. Fannie has paid about $95 billion and Freddie about $37 billion of the approximate $182 billion used to put them in federal conservatorship. The mortgage giants are now on schedule to pay back the taxpayers for the bailout that lead to their conservatorship. Rates are expected to remain relatively low for the next few years and, according to Core Logic, another 1.8 million mortgages are expected to be freed from negative equity with just a 5% increase in prices.  According to data from the Case-Schiller index, prices had appreciated 10.2% in March, ahead of analysts’ expectations.

All of these indicators point to emergency measures no longer being required.

The housing market is not the only factor driving this recovery, however. In addition, the closest thing to a silver bullet solution-more jobs- is happening, slowly, but surely. A declining unemployment rate is the essential precondition to any recovery. And that’s been the case from a high of 10.0%, in October 2009 shortly into President Obama’s first year, to a recent low of 7.5%. An expanding workforce means consistent incomes to get mortgages paid on time and save for future down payments. This translates directly to fewer delinquencies, defaults and more first-time homebuyers to keep the housing market churning.

Policy Brief Cited by San Diego Union-Tribune

Writing for San Diego Union Tribune, Mike Freeman cites PPI chief economist Michael Mandel’s policy brief on the spread of technology and internet jobs in California:

The Progressive Policy Institute examined a database of online help-wanted ads supplied by the Conference Board — which measures consumer confidence — and South Mountain Economics. The aim was to pick up changes in labor demand before they show up in official employment data.

For March, the San Diego County region posted a 3.1 percent increase in help-wanted ads for Internet/technology positions, such as Web developers, data analysts and software developers, compared with the same month in 2012.

That was the second highest percentage gain in the state behind the Central Valley, which posted an 11.8 percent increase.

“We’re able to see there is an awful lot of growth in demand for Internet/tech jobs outside the Bay Area,” said Michael Mandel, chief economic strategist with the Progressive Policy Institute. “These jobs are growing faster than the baseline growth in these regions.”

Read the article here.

After Terrorism, Fools Rush In

The pattern is sickeningly familiar: After every atrocity committed in the name of Islam, left-wing intellectuals and celebrities, scarcely bothering to conceal their schadenfreude, start lecturing us on the West’s moral failings.

So it was this week, when a young British soldier was butchered in broad daylight in the streets of London by men of Nigerian descent claiming to avenge Western violence against Muslims. Before a decent interval could pass, the moral equivocators rushed in to validate the attackers’ claim and say, in effect, it’s all our fault.

Most egregious, as usual, was Michael Moore, whose anti-American agitprop has made him rich and famous. He offered this sarcastic tweet: “I am outraged that we can’t kill people in other countries without them trying to kill us.”

Glenn Greenwald, another American acolyte of the “blowback” thesis, used his column in The Guardian to take British leaders to task for calling the attack an act of terrorism. In Greenwald’s logic-chopping estimation, that’s the wrong word because the victim was a soldier, not a civilian, and since America has declared the whole world the battleground in its fight against terrorism, well, you can’t apply the T-word to this particular “horrific act of violence,” which should instead be properly regarded as an act of war.

This distinction seems unlikely to console the family of 25-year-old Lee Rigby, a drummer in the Royal Fusiliers. And it course it rests on an assumption of moral equivalence in the conflict between Islamist terrorists and the United States and its allies.

Continue reading “After Terrorism, Fools Rush In”

Mayoral Races of ’70s Offer Similarities, if Little Insight, to the Current Field

Writing on the New York City mayoral race, New York TimesSam Roberts quotes Fred Siegel on the race’s similarities to the 1970s race:

As it turned out, Mr. Biaggi wound up third in the field of four major candidates. Mr. Beame, then the comptroller, came in first but did not earn enough votes to avoid a runoff against Herman Badillo, a Bronx congressman hoping to become the city’s first mayor of Puerto Rican descent.

But Mr. Badillo’s ill-advised derision of Mr. Beame as “a malicious little man” during a particularly nasty debate helped seal his fate.

Mr. Beame won the runoff, 61 percent to 39 percent, and was easily elected the city’s first Jewish mayor in November, succeeding John V. Lindsay, who had chosen not to run.

“It wasn’t clear who was going to follow him, so you ended up flooding the field,” said Fred Siegel, a senior fellow at the Progressive Policy Institute. “No one could stake a strong claim.”

Read the entire article here.

The War on Poverty We’re Not Waging

Since 2000, the nation’s poverty rate has been creeping inexorably upward, from a near-historic low of11.3 percent in 2000 to 15 percent in 2011. But in the suburbs, poverty has been exploding.

According to a new book released this week by researchers Elizabeth Kneebone and Alan Berube of the Brookings Institution, suburban poverty has soared by 64 percent in the last decade.  The roughly 16.4 million suburban poor now outnumber the urban poor, and the pace of growth in suburban poverty is outmatching that of inner cities. In suburban Chicago, for example, the poverty rate has increased by an alarming 99 percent in the last ten years, while in Houston, the share of suburbanites in poverty has climbed by 103 percent.

By all rights, Kneebone and Berube’s work should catalyze the same public response as another classic work on American poverty, Michael Harrington’s 1962 book, The Other America. The shock to the conscience generated by Harrington’s book galvanized public outrage, leading to President Lyndon Johnson’s War on Poverty and the launch of the Great Society.

Alas, however, this is 2013. Continue reading “The War on Poverty We’re Not Waging”

How to Save the GOP

The Atlantic’s  Molly Ball quotes PPI President Will Marshall while discussing what Republicans can learn from the Democrat’s revival:

 The DLC had initially pursued a “big tent” strategy aimed at winning over Democrats from across the political spectrum. But as Kenneth S. Baer recounts in his book on the council, Reinventing Democrats, the group found itself not standing for anything in particular. The DLC eventually embraced a more confrontational strategy, denouncing the party’s ways at meetings across the country. The process was ugly, the sort of spectacle parties generally go to great lengths to avoid. But these New Democrats, as they called themselves, were serious about change. “Our goal was not to unify the party but to expand it,” Al From, the founder of the DLC (which closed down in 2011), told me recently.

Along the way, the DLC tried and discarded other strategies. One was working within the Democratic National Committee. “National committees are consumed by fund-raising, campaigns, and electoral mechanics—they don’t really do doctrine,” Will Marshall, the president of the Progressive Policy Institute, a think tank founded by the DLC in 1989, said. “We needed an external perch from which to critique and change an organization in decline.”

Read the rest of the article at The Atlantic.

 

Don’t blame Apple; blame the tax code

The Capitol Hill hearing on the IRS scandal this week upstaged another Senate investigation into how U.S. technology companies shelter earnings from domestic taxes. That was just as well, since the real culprit here isn’t tax-dodging corporations; it’s America’s absurd corporate tax code.

The Senate Permanent Subcommittee on Investigations had hoped to make a media splash by landing a big fish rarely seen in Washington: Apple CEO Tim Cook. It released a 40-page report on the eve of the hearing, excoriating Apple’s use of “gimmicks” to avoid paying U.S. taxes on $44 billion in offshore income between 2009 and 2012.

Chaired by Sen. Carl Levin, D-Michigan, the subcommittee has been investigating the tax avoidance strategies of major U.S. tech firms. Last year, Microsoft and Hewlett-Packard were in the dock; Tuesday, it was Apple’s turn.

Continue reading at CNN.com.

Why FHFA’s Ed Demarco Isn’t Going Anywhere

If confirmed by the Senate, Rep. Mel Watt, D-N.C., will replace Ed DeMarco, the current – and controversial – acting director of the Federal Housing Finance Agency. While Democrats have been calling for DeMarco’s head for years as he has pushed back on more extreme housing remedies, Republicans have quietly supported DeMarco’s decisions.

But the president’s pick portends big changes in housing policy. After all, the FHFA is the main federal regulator overseeing housing policy, and whoever runs it will have a major impact on home ownership, mortgage lending, and the future of Fannie Mae and Freddie Mac, the two mortgage giants in federal conservatorship.

But for all the fanfare surrounding the nomination of Watt, there’s one small matter standing in the way. Though DeMarco is a holdover from the Bush administration, the current political climate in Congress means he isn’t going anywhere anytime soon.

That’s because nominees for FHFA Director must be confirmed by the Senate. In years past, Congress routinely ratified the President’s choices. No longer. Nowadays Senate confirmations are the political equivalent of a reality TV show, in which lawmakers preen for the cameras, fight among themselves and nominees are subjected to a merciless and microscopic scrutiny of their personal lives.

Continue reading at US News & World Report.