Friday, September 11, 2009 3:42 PM
Subprime loans are often blamed as the basis of current financial crisis. Thats unfortunate, according to Elinore Longobardi in the Columbia Journalism Review, because subprime describes only the borrower, in unflattering terms, and has nothing to say about the lender.
A better option is to point the finger at predatory lendingthe crooks who made bad loans to vulnerable populations like minorities and the elderly. The press used the term subprime somewhere between seventy or eighty times more frequently than the term predatory lending, according to CJR. That statistic points to the abject failure of the press in predicting the financial crisis, and it places the blame for the crisis in the wrong place.
Source: Columbia Journalism Review (Article not yet available online.)
Image by woodleywonderworks, licensed under Creative Commons.
Monday, June 08, 2009 2:09 PM
Busy executives don’t have time to fire all the employees they need to in the midst of this financial crisis, and human resources departments can be expensive. Writing for McSweeney’s, Marco Kaye came up with the idea of a Netflix-style service called Netloss, where execs can send pink slips automatically through the mail. Managers create a queue of all their employees, and Netloss will fire them automatically. No late fees, and no need for a messy talks. There’s even a program that can suggest other employees to fire based on your firing habits and preferences.
The service sounds like a great idea, but it lacks that personal touch that only a trained HR professional can provide. In an episode of This American Life, Ira Glass sat down with someone who has fired more than 1,500 people. He never uses the term “fired” in fact. Instead, people are “exited” or “part of that downsizing” or there is simply “a parting of the ways.”
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Sources: McSweeney’s, This American Life
Monday, February 09, 2009 3:38 PM
Desperate times call for desperate measures and, hopefully, desperately good reporting. But when it comes to the stimulus package—the crucial tonic, we’re told, for our ailing economy—are we getting it?
I’ve been on the prowl for solid, digestible treatments of the strengths and weaknesses of the multi-billion dollar plan, because frankly, I need some help wrapping my head around it. But the stories that seem to be everywhere—those detailing the demise of Obama’s honeymoon (starts around 3:15), accounts of partisan gamesmanship, and analyses of who’s winning the spin wars—make good fodder for gossip sessions, but do little to help us understand how we got into this mess and form educated opinions about the best way out of it.
Here are a few things we found helpful (and have enjoyed) so far:
From the New York Times, lessons the U.S. can learn from Japan’s stimulus spending in the ‘90s, which included heavy infrastructure investments.
Two stories from This American Life and Morning Edition describe the Keynesian approach of the stimulus package (starts around 36:15) and evaluate its merits. TAL has also done great, compelling reporting on the housing and financial crises.
NPR’s Planet Money blog has some handy maps that act as visual guides to the stimulus plan’s expected state-by-state impact.
Marketplace’s “decoder” series translates econ-speak into language normal people can understand.
Keep it coming, people: If you’ve come across particularly good stimulus coverage, let us know about it in the comments section below.
Sources: New York Times, This American Life, Morning Edition, Planet Money, Marketplace
Tuesday, December 23, 2008 9:11 PM
Los Angeles’ Museum of Contemporary Art is in dire financial straits, having dug itself into a hole through rampant overspending. Billionaire Eli Broad has offered $30 million to the museum, but only if the museum raises an additional $15 million itself. Artists David Weiner and Angie Lee tried to help out the old-fashioned way: by holding a bake sale.
Almost all of the treats were based on pieces from the museum’s collection, including Giacometti-shaped baguettes and Jasper Johns-frosted cakes. But the most coveted treat was definitely the financier cookies, selling for a cool $1 million apiece.
In the end, the bake sale made just over $300. Alas, that means none of the high-roller cookies were sold, but the sale still drew quite a crowd to see the wares and watch Weiner dole out Claes Oldenberg-esque slices of fruit pie.
Image courtesy of douglemoine, licensed under Creative Commons.
Tuesday, December 02, 2008 11:23 PM
Religious institutions are far from immune to the woes of recession. Recent articles for the Boston Globe and Ethics Daily report that many churches and religious organizations are already feeling the downturn squeeze. And as the Globe points out, widespread financial crises are particularly tricky for the faithful:
For religious organizations, the nation's economic woes hit twice. The faith groups rely for income on sources vulnerable to a downturn - contributions from individuals, income from investments, and, in the case of faith-based social service organizations, funding from government. But the faith groups also aspire to assist the hungry and homeless and unemployed, meaning that during a recession their expenses go up even as their revenue may go down.
For Ethics Daily, Robert Parham of the Baptist Center for Ethics predicts a Darwin-esque future for religion, which he thinks could profoundly affect our belief landscape:
A deeper and prolonged financial crisis will likely result in a survival-of-the-fittest scenario among local and national faith organizations, which, in turn, will reshape the religious ethos for years to come.
(Thanks, Religion Blog.)
Image by szlea, licensed under Creative Commons.
Friday, October 24, 2008 10:03 AM
Are Americans living in a recession or a financial apocalypse? Is now a time for prudent financial choices or a time to pray? Sean Cole reports for Marketplace that some economists are embracing the gloomy financial indicators as a sign that Armageddon is upon us. Cole talked to an “end times economist” who said that the current recession is God “saying that this world's financial system is built upon an unrighteous foundation.”
The financial system has become a religious cult of its own, Peter Laarman writes for Religion Dispatches. The financial crisis was caused in part by an adherence to “economism,” a creed that Laarman describes as “the notion that every part of human life is governed by economic considerations and that everything that happens—or at least everything that matters—is reducible to human monads pursuing their rational self-interest.”
Questions about financial regulation in the current presidential race should be treated with the same importance as religious questions, since the two have become so closely related. Laarman writes, “we are now in actual danger of losing what remains of democracy itself in our unseemly desire to enshrine the money-changing cult at the very center of the temple.”
“Whether you're a believer or not, maybe now is a good time to ask ourselves what we worship,” Cole said for Marketplace. That simple sentiment was applauded by Amy Frykholm, writing for Theoblog. Even if he didn’t mean to, Frykholm writes that Cole echoed Matthew 6:2, which reads, “Where your treasure is there your heart will be also”
David Paul Ohmer
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Monday, October 06, 2008 2:08 PM
One perversely positive outcome of our recent economic meltdown might be that the imminent presidential election could turn on something as consequential and substantive as the nation’s economy—rather than, say, red herrings like the Swift Boat campaign or which candidate would make a better drinking buddy.
The contours of this battleground were further solidified today by the Obama campaign’s relatively epic 13-minute documentary about John McCain’s involvement in the Keating Five Scandal in the 1980s. The video drives home the point that the savings and loan collapse not only precipitated the recession of the early 1990s, but is “eerily similar” to today’s credit crisis.
By elucidating the complex machinations of the Keating scandal, Obama’s video deals a powerful blow to McCain where he is perhaps most vulnerable—his troubled history with the economy and lackluster response to its latest downturn. But it remains to be seen whether anyone besides the die-hard wonks will sit through a 13-minute video about the economy—and how well Obama’s attack will stick as the opposition accuses him of “palling around with terrorists.”
For those too busy or campaign-weary to watch the entire video, its 30-second trailer (yes, apparently even campaign videos have trailers now) might prove more manageable.
Monday, October 06, 2008 11:01 AM
After the reality of our dismal economic situation hit with full force, the New Republic turned to “some of the most thoughtful people” they know for insight on how the troubled economy will change the country. The short essays bring a big picture perspective to the financial crisis, which is particularly useful to those of us struggling to understand what numbers like $700 billion mean for the future.
Our current situation is being widely compared to the Great Depression, but Alan Wolfe, a professor of political science at Boston College and New Republic contributing editor, says it’s not likely to have the same effect on our political culture:
Too much about the United States has changed over the past few decades for history to come anywhere close to repeating itself. The most important of those changes is that the anger that greeted the Great Depression is of very different quality than the anger apparent now. Seemingly like the 1930s, Americans are denouncing Wall Street. But their hostility is too diffuse and incoherent to help them channel it constructively. The past eight years have seen the enactment of public policies that time after time rewarded lobbyists, increased the wealth and power of the already best off, and redistributed income away from ordinary Americans. Yet by and large Americans accepted all this without protest. Now, all of a sudden, they are speaking like Populists of old, attacking greed and calling for regulation. Their protest, alas, is more symbolic than concrete. As such, we are unlikely to witness blame assigned where it belongs; nor are we apt to see the passage of serious reforms dealing with long-term structural changes in the economy or any diminution of lobbyist influence. A scary economic moment will transform itself back to politics as usual in the blink of an eye.
But Andrew Bacevich, author of The Limits of Power: The End of American Exceptionalism, believes the downturn holds important lessons about politics as usual, particularly during the Bush years:
When it comes to statecraft, the chief lessons of the Bush era are these: Arrogance and hubris have revealed the very real limits of American global leadership; recklessness and ineptitude have revealed the limits of American military power; a foolish and self-indulgent unwillingness to live within our means has now made clear the limits--and the fragility--of American prosperity. We may choose to ignore these lessons--neoconservatives will insist upon it--but the consequences of doing so will be severe.
A season of reckoning is upon us. To say that is not to imply that the United States is now condemned to an irreversible downward spiral. It's not. It is, however, time for us to clean up our act and to put our own house in order. When it comes to foreign policy, that means restoring a balance between our commitments and the means that we have at hand to meet those commitments.
... Realism and modesty must become our watchwords.
Lastly, Columbia University provost and history professor Alan Brinkley thinks we could see important, though not fundamental, changes in American politics:
Is this the end of the "end of big government?" Will the right fade into obscurity to be replaced by the long-awaited revival of liberalism or progressivism? I doubt that we will see such a fundamental shift in the polity. But I think it is realistic to hope that the highly ideological politics that have driven our public life now for several decades will give way to a somewhat more pragmatic and realistic approach to our problems.
Look for continuing contributions to this series, which are being posted on the New Republic's blog, the Plank.
Wednesday, October 01, 2008 9:27 AM
The press finally found something more compelling to cover than Sarah Palin: “It's the economy, stupid,” according to the Project for Excellence in Journalism. Each week in its news index, PEJ breaks down the storylines that are filling the nation's news holes, and the results can be quite telling. The week of September 15–21 marked the first time since the Democratic National Convention that campaign coverage had been dominated by a story without Palin as its central character. According to PEJ, the economy sprinted to the top of the pack that week, accounting for 43.3 percent of campaign coverage.
But, “the focus on the economy practically came out of the blue,” despite the fact that our financial woes had been brewing for some time, says PEJ. Take a look at campaign coverage for the week of September 8 – 14:
NPR aired a story this week that may offer some explanation. Media consultant Jeff Jarvis tells David Folkenflik that even the media are overwhelmed by the nature of the news these days. “It’s just too big and too complicated, and it requires both too much background and fundamental understanding about economics,” Jarvis said. Folkenflik writes that the media is struggling to keep up with such huge national developments in the midst of a presidential campaign. “The breakneck pace of developments means a lot of news worth knowing receives the briefest burst of attention before being dropped for something hotter.”
Charts courtesy of the Project for Excellence in Journalism, a project of the Pew Research Center. "Top Campaign Storylines of the Week, September 15-21," published September 22. "Top Campaign Storylines of the Week, September 8-14," published September 15.
Tuesday, September 23, 2008 2:13 PM
Greed has emerged as a unifying culprit in the current financial crisis and recession in the United States. John McCain blames the situation on “unbridled corruption and greed.” Barack Obama’s campaign has presented a plan to reform the “greed and excesses of Washington.” Not far beneath this rhetoric is the implication that both presidential candidates are ostensibly rejecting the Gordon Gekko, Wall Street mantra of “greed is good” for a more moral and less sinful worldview.
Although it is a sin, greed does have its benefits, according to Dr. Rebecca Blank, interviewed on Religion & Ethics Newsweekly. “It's greed that makes people work harder, be more productive, and helps the economy grow,” Blank says. Greed also may not have been behind every decision that led to the crisis. Blank points out that there were “a lot of people at the very beginning of this, the whole sub-prime crisis that started this off, who saw themselves as providing more funds for low-income families. They were doing a good thing.”
The problem isn’t that people don’t care about each other, Rabbi Michael Lerner writes for Tikkun, it’s that people “don't feel ready to trust their own desires and think that they would just be making a fool of themselves to imagine a world in which people really took care of each other.” Americans continue to be generous right now, even when surrounded by excess and greed. People need to acknowledge and cultivate that altruistic impulse in others, instead of giving up on the government and the market as inherently evil.
The American economy has benefited millions of people, while tapping into a selfish and materialistic impulse inside of humans at the same time. Some people believe that the free market will work itself out on its own, but Jim Wallis writes on the God’s Politics blog, “left to its own devices and human weakness (let’s call it sin), the market too often disintegrates into greed and corruption, as the Wall Street financial collapse painfully reveals.” The government, according to Wallis, must figure out a way to encourage innovation, but reign in the greed.
It’s up to the American people to push elected officials in that direction, toward good regulation and away from unbridled greed. Too often, according to Lerner, politicians keep the “discussion in vague and technocratic terms that avoid the central ethical issues that are always at the heart of the economy.” Lerner writes that politicians, including Obama, need to directly address the moral and ethical issues facing the country, not just the economic ones.
Image by Galaksiafervojo, licensed under Creative Commons.
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