Economy

GOP Gags Witnesses on Credit Card Woes

Republicans on a consumer credit subcommittee required witnesses to waive privacy rights to their financial history before testifying about run-ins with credit card companies.

The End of Cheap Food?

If cheap food is a thing of the past, the result could be disastrous for fighting poverty and could bring an end to the long-term rise in U.S. living standards.

Activist Approach to Ayn Rand

As former Federal Reserve Chairman Alan Greenspan continues to spin his defense of his legacy, we noted this week that his early mentor, Ayn Rand, would have approved of his unapologetic stance on laissez-faire capitalism and his aversion to government regulation of the financial markets. We also explained that the late author once had a cultish following that has waned in popularity. Some people pick up her books as youthful readers, then never look back. As one Huffington Post reader put it, in response to the story: "I read "The Fountainhead" and "Atlas Shrugged" and I was very impressed WHEN I WAS IN HIGH SCHOOL."

Free Cash! (And Don't Forget Us in November)

If you're like most working Americans, your mailbox this week held a gift from the IRS in the form of an "Economic Stimulus Payment Notice." These gems of efficiency are designed to inform taxpayers that they'll be receiving a one-time payment of up to $600 for individuals -- or $1,200 for couples filing jointly -- courtesy of their benevolent Washington representatives.

But there's something curious here, which is this: In order to get these checks, taxpayers have to do -- drum-roll here -- precisely nothing. That's right. Just file this year's return, like you're required to do anyway, and the extra cash will follow.

"These special letters remind people that they won’t need to do anything more than file a 2007 tax return in order to put the stimulus payment process in motion,” Acting IRS Commissioner Linda Stiff said in a statement.

Which begs the question: Why did we need to be told to do nothing?

A quick glance at the notice gives the answer. "Dear Taxpayer," the text reads. "We are pleased to inform you that the United States Congress passed and President George W. Bush signed into law the Economic Stimulus Act of 2008, which provides for economic stimulus payments to be made to over 130 million American households."

The message is clear:

McCain Policy Defies Math

McCain just finished his "forgotten" America tour, where he offered little to the working and poor who turned out to hear him.

The Plunge Protection Team

An elite group of financial sector protectors just celebrated its 20th birthday.

Imploding Credit Bubble to Hit $1 Trillion

From 2002 through 2005, Federal Reserve Chairman Alan Greenspan kept banks’ own borrowing rates lower than the rate of inflation – in effect, for bankers, money was free.

The Saudi Arabia of Food

Don't panic when U.S. farmers switch crops.

Greenspan Defends His Legacy As Housing Crisis Widens

On his watch, the Fed failed to rein in abusive and predatory practices that caused millions of people to lose their homes. Now Greenspan can't stop a growing movement to put some brakes on the financial markets.

Edwards Moves on With MoveOn

$20-million activist effort targets 'obstructionist" members of Congress -- Democrats as well as Republicans -- that don't seek a rapid withdrawal from Iraq.

Credit Crisis Only Begins With Mortgages

The hard reality is that the economy is facing a one-two knockout blow from a collapse in consumer spending, plus a shock-and-awe wave of asset write-downs that is wreaking havoc in the financial sector.

Debt Creeps Into Democratic Campaign

The bankruptcy experts over at creditslips.org, while careful to shy away from actually going down that road, nonetheless picked apart the comments on bankruptcy that came up during the recent Democratic presidential debate. Bankruptcy reform, passed in 2005, made it harder for consumers to wipe away certain debts. Robert Lawless, a law professor and bankruptcy expert at the University of Illinois College of Law, summed things up this way: "It is only Sen. Obama who can claim he did the right thing."

 

More from Lawless:

 

How Fraud Fueled the Mortgage Crisis

The question of who did most of the lying and cheating will be crucial in deciding who deserves help in any housing rescue plan.

Where Your Tax Dollars Go

To celebrate tax season, the Center on Budget and Policy Priorities has compiled a nice summary of where your dollars go (or, more specifically, where they went last year.)

In brief, the federal government took in more than $2.5 trillion in tax revenues in fiscal 2007, and spent more than $2.7 trillion (the $162 billion difference represents the budget deficit, to be paid by your kids and grandkids).

Not So Fast on Mortgage Solutions

Any initiative is almost certain to be a windfall for the custom-suit set.

Is Our $3 Trillion War Fueling a Recession?

A battle of ideas is swirling, as economists like Nobel laureate Joseph Stiglitz cite war costs as as one cause of the subprime mortgage crash.

Is It OK To Walk Away?

As I mentioned in an earlier post, the Financial Times has a great piece noting the tendency of borrowers now to walk away from their homes, even if they could still pay on the mortgages. It's particularly true in cases where borrowers owe more than their homes are worth.

 

This of course raises the question: Is it ever morally acceptable to walk away from a debt ? Has it become socially acceptable?

Gas Math

Yesterday, Sen. Hillary Rodham Clinton (D-N.Y.) joined the popular movement calling for a summer moratorium on the 18.4-cent/gallon federal gas tax. This is the same idea for which Sen. John McCain (R-Ariz.) introduced legislation earlier in the month. Both of the presidential hopefuls say the proposal would provide consumers much-needed relief during the peak driving months.

The trouble is (as we pointed out two-weeks ago), it makes not even an ounce of economic sense. In fact, if the laws of supply and demand mean anything to anyone anymore, dropping the price of gas will encourage greater consumption, pushing up demand and hiking the price.

Is the Worst Over?

Not by a long shot.

Another Food Crisis Cause?

Did the World Bank and the International Monetary Fund somehow contribute to the global food crisis? That's the intriguing question Salon's Andrew Leonard poses. He points out that policies by both agencies in the 1980s and 1990s required developing countries to pull back on government intervention in their economies in return for aid. Developing nations also were encouraged to open their borders up for free trade.