• FOMC Transcripts from 2007-2010

    As promised, here are the transcripts of certain internal Federal Reserve meetings from 2007-2010, specifically, the meetings where their top officials planned their response to the gathering crisis (these are known as Federal Open Market Committee meetings, or FOMC).  Check out Ryan Grim's article on The Huffington Post: Fed Officials With Privileged Info Head to Wall Street.

    What do you take out of this?  Download the full PDF and print, here or simply view below.

    Thanks to The Huffington Post, we were able to compile this revolving door list of individuals that were in attendance at these meetings, who moved into the private sector.

    - Deborah Bailey (Deputy Director, Div of Banking Supervision and Regulation) - Deloitte
    - Patrick Barron (First Vice President, Federal Reserve Bank of Atlanta) - Retired
    - Meredith Beechey (Economist, Div of Monetary Affairs) - Sveriges Riksbank
    - Susan Bies (Committee member) - Bank of America
    - Laricke Blanchard (Assistant to the Board) - Pension Benefit Guranty Corporation (government agency)
    - Roger Cole (Director, Division of Banking Supervision and Regulation) - Retired
    - Paul M. Connolly (First VP, Boston Fed) - Eastern Bank/John Hancock Life Insurance Company
    - J. Benson Durham (Assistant Director, Division of Monetary Affairs) - The Capital Group Companies
    - Karen Dynan (Ass't Director, Division of Research and Stats) - Brookings
    - Joseph Gagnon (Deputy Associate Director, Div. of International Finance) - Peterson Institute
    - Michael Gapen (Economist, Div. of Monetary Affairs) - Barclays Capital
    - Jon Greenlee (Associate Director, Div of Banking Supervision and Regulation) - KPMG
    - Bob Hankins (Senior VP, Federal Reserve Dallas) - Retired
    - Thomas Hoenig (Committee member; President of Federal Reserve Kansas City) - FDIC
    - Donald Kohn (Committee member) - Brookings
    - Randall Kroszner (Committee member) - Patomak Global Partners/University of Chicago
    - Brian Madigan (Secretary and Economist; Associate Economist) - Barclays
    - Eileen Mauskopf (Senior Economist, Div of Research and Statistics) - Johns Hopkins
    - Laurence Meyer (Visiting Reserve Bank Officer, Div of Monetary Affairs) - Macroeconomic Advisers LLC
    - Cathy Minehan (Committee member) - Arlington Advisory Partners, Simmons College School of Management
    - Frederic Mishkin (Committee member) - Columbia
    - Michael Moskow (Committee member) - Chicago Council On Global Affairs
    - Stephen Oliner (Senior Adviser, Div of Research and Statistics) - AEI
    - Patrick Parkinson (Deputy Director, Div of Research and Stats) - Retired
    - Roberto Perli (Dep. Assoc. Dir., Div. of Monetary Affairs; Assistant Director, Div of Monetary Affairs) -  International Strategy & Investment
    - Brian Peters (Senior VP, New York Fed) - AIG
    - William Poole (Committee member; President of St. Louis Fed) - Cato
    - Vincent Reinhart (Secretary and Economist) - AEI
    - Art Rolnick (Associate Economist; Senior VP Federal Reserve Minneapolis) - Human CapitalResearch Collaborative at the University of Minnesota
    - Gordon Sellon (Associate Economist) - Oklahoma City University
    - Nathan Sheets (Economist) - Citi
    - Coryann Stefansson (Associate Director, Div. of Banking Supervision and Regulation) - PwC
    - Gary Stern (Alt. Member, FOMC) - Washington U. St. Louis (and Too Big To Fail)
    - David Stockton (Economist) - Macroeconomic Advisers LLC
    - Kevin Warsh (Committee Member) - Hoover
    - Jonathan H. Wright (Deputy Associate Director, Div of Monetary Affairs) - Johns Hopkins

  • Is The Federal Reserve Coming Clean?

     - 

    Tune in to the Dylan Ratigan Show on MSNBC at 4pm ET for an exclusive look at the transcripts of meetings of top Fed officials during the financial crisis from 2007-2010.

    As I told you on Friday, the Huffington Post and the Dylan Ratigan Show got some significant internal documents from the Federal Reserve.  We'll be releasing them at 4pm on my show, on the Huffington Post, and at DylanRatigan.com.  They gave us the transcripts of certain internal meetings from 2007-2010, the meetings where their top officials planned their response to the gathering crisis (these are known as Federal Open Market Committee meetings, or FOMC).  Willingly giving away documents isn't how the Fed typically operates, especially documents that might point to serious management problems within the central bank.  They are known as a tight-knit bank-friendly super-secret agency.

    Is the Fed finally coming clean?

    After all, recently, Federal Reserve Chairman Ben Bernanke has engaged in a public relations campaign to improve the image of his vaunted Fed.  The central banker has lectured to college students, gone on a media outreach campaign, and even opened a twitter account.  New York Federal Reserve Bank President William Dudley has also gone out of his way to introduce his part of the system to the public.  The New York Fed has opened up its research team to the world with a new blog.

    Dudley, who runs the enormously powerful New York branch of the Fed, in some ways has gone even further than Bernanke.  At a speech in New Jersey, Dudley argued that taxpayers should forgive mortgage debt owed to Fannie and Freddie, as a way of preventing foreclosures and stimulating the economy.  This was remarkable - the Fed just doesn't get involved in policy disputes like this, and it would be hard to imagine that the Fed would intervene on the side of homeowners.

    It seems like the public pressure on the Federal Reserve over the past few years had an effect.  After a long, protracted battle in Congress, Senator Bernie Sanders and Rep. Ron Paul were able to force an audit of the Fed by the Government Accountability Office.  That audit came out in 2011.  Bloomberg, which filed a Freedom of Information Act to get the Fed's emergency lending data, won its suit to get that data in the courts.

    So is it a new day at the Fed?  The Huffington Post and my research team filed a Freedom of Information Act Fed back in January.  We asked the Fed for the transcripts of the internal meetings of the Fed's open market committee (FOMC) from 2007-2010.  These meetings are where decisions are made, and they are released on a five year time lag.  The Fed released the transcripts from 2006 earlier this year, and that transcript showed that the top officials at the Fed simply were not concerned about the housing bubble.  It was fascinating and useful information, critical for policy-making around our banking system.

    I thought, since the Fed wants to turn over a new leaf, why not ask for the transcripts of the meetings from 2007-2010?  There are no proprietary secrets there.  The Fed will release them in a few years anyway.  Let's just accelerate the timetable, and let everyone know what really went down at those meetings during the crisis of 2007 and 2008.  And we got them.  And we'll show you just what we got.

    Still, in at least one way, it's not clear that the Fed has changed its stripes.  When Dudley argued that Fannie and Freddie should reduce debt owed by millions of homeowners, what he didn't say is that this would help the big banks by making the home equity lines of credit they own on that very same debt more valuable.  Taxpayers should transfer more capital to the big banks.   This proposal is, as Gretchen Morgenson said, a "bailout by another name."  And why wouldn't it be?  Banks are still the Fed's real client.  The board of directors of the New York Fed includes Jamie Dimon of JP Morgan Chase, as well as two other bankers.

  • You had me at hello: How phrasing affects memorability

     - 

    Cornell researchers took short, memorable lines from around 1,000 movies and compared them against other lines of a similar length spoken by the same character at about the same point in the film. (They define memorable lines as those listed as such on the Internet Movie Database website, IMDB.com.)

    They then asked individuals who had not seen the films to guess which of the two lines was the memorable one. On average, people chose correctly about 75 percent of the time, confirming the idea that the memorable features are inherent in the lines themselves and not the result of some other factor, such as the length of the lines or their location in the film

    Here is the link for the test http://memo.clr3.com/

  • Tonight!: Book Event- Wednesday April 4th, Barnes and Noble in Paramus, NJ

    Here at The Dylan Ratigan Show, there’s nothing we love more than talk with people who care about the same issues we do, and having a discussion and debate on fixing our economy and our country.  (You might have seen some of our previous stops at at Book People in Austin, Books and Books in Coral Gables, Florida,Joseph-Beth Booksellers in Lexington, The Book Loft in Columbus, and a whole bunch more on the 30 Million Jobs tour.)

    Despite all our travels, we haven’t hit one state that’s right across the river from 30 Rock.  JERSEY!  On Wednesday, join us for what we’re sure will be a fantastic talk with Dylan.  Come say hi, take photos, get your book signed, and tell Dylan what’s on your mind!  Details are on Barnes and Noble’s website, and here:

    DATE: Wednesday, April 4th at 7:30PM
    LOCATION: Barnes and Noble — 765 Route 17 South, Paramus, NJ 07652 (Google Maps)
    MORE INFO: BarnesandNoble.com or call 201-445-4589

    Find directions here with our handy-dandy Google Map…

  • Are Forces in the U.S. Driving Towards (Some) Abundance in the Future?


    There’s no question that we are living at a time of explosive change — perhaps the greatst since the turn of the 19th Century.  But with the level of potential energy and risk in the this country equally at odds, which one will win out — abundance or scarcity?  And how can we push our country towards a path to renewed wealth and a good standard of living for all, rather than just for those already at the top?

    Peter Diamandis believes that because of forces already at work, the future will be better than we think.  He is an entrepreneur turned philanthropist, and the founder and CEO of the X-Prize Foundation, a non-profit encouraging and rewarding those who dare to make the impossible possible.  He is author of the new book Abundance: Why the Future is Better Than You Think.  Here’s his discussion with Dylan.


    Want to learn more? You can download a free chapter of Peter’s book at his website here.

    - Meg Robertson is a digital producer for DylanRatigan.com. You can find her on Twitter @MegRobertson.

  • Do you live in a rapist friendly state?

    From Loop 21:

    Hitting the lottery once in a lifetime will never happen to most of us, but Brian Brockington just hit the criminal justice system jackpot, not once, not twice, but three times. DNA evidence has linked him to three sexual assaults but lucky old Brian will soon be released from prison without ever serving a single day for any of the assaults in question.

    So is Brian Brockington just one of the “luckiest” men alive? Perhaps. But he had some help.  Continuing the lotto metaphor, you could say the powers that be screwed up and now all of us have to pay up, starting with the women DNA evidence links him to assaulting. Or in casino terms one might say the slot machines are indelibly broken and those in charge of the house haven’t dubbed repairing them a priority. As a result we’ll likely see a lot more Brian Brockington’s winning the criminal lotto in coming years. Allow me to explain.

    As reported in The New York Daily News, “Brockington, 35, was arrested on rape charges in 2007 and his cousin Rodney Howard, 36, was arrested two years later after their DNA matched evidence from a 1993 gun-point attack on a 29-year-old woman. But because of a police backlog, the DNA evidence from the crime wasn’t processed for nearly a decade — and prosecutors filed charges a day after the crime’s 10-year statute of limitations expired, said Steven Reed, spokesman for the Bronx DA. The DA’s office realized their error only after the cousins were arrested — and prosecutors were forced to drop the rape charges.” Brockington was subsequently linked to two other sexual assaults.

    The scary thing about the Brockington case (you know besides the fact that a serial rapist will likely soon be walking among us) is that the current system virtually insures that Brockington will not be the last rapist set free by what some are calling a “technicality” but increasingly looks like willful legal negligence. Not simply on the part of police and prosecutors, but on the part of legislators.

    Read the rest of Keli Goff's article at Loop 21.

  • Tour Diary: The DR Show in Columbus, OH and The Ohio State University

    Meg Robertson is a Digital Producer for The Dylan Ratigan Show.

    After kicking off the college tour leg of our 30 Million Jobs campaign in Lexington, we made our way to the great city of Columbus, Ohio. Here’s what we did while we were there.

    If you haven’t guessed, the whole team at The Dylan Ratigan Show can’t get enough of being on the road. Maybe it’s escaping New York for a few days that we like, but most of all, it’s getting to see cities we haven’t been to.  Meeting new people. Supporting some fantastic independent bookstores (like this one, andthis one), and having an opportunity to talk and debate real issues with folks we meet on the road.

    To kick the day off, we did an early afternoon Greedy Bastards event at Book Loft of German Village.

    Book Loft of German Village

    If you’re ever in Columbus, you have to come check the surrounding German Village neighborhood out — it’s walkable and has lots of independent retail spots, with loads of beautiful historic beautiful homes and buildings to walk around and see.  The weather was nice(ish), so we held our Book Loft talk outside. (You can check out all the photos on our Facebook page.)

    Dylan at Book Loft!

    After the Book Loft talk wrapped up, we stopped by local coffeehouse Cup O’ Joe right next door to have a quick dose of caffeine — another business that is highly plugged in to its community.

    Stopping by Cup O' Joe...

    While we were there, we met up with some folks who were at the book event. It’s not like we are ever at a loss for words, so…

    After Book Loft wrapped up and we got our needed caffeine, it was time to head over to The Ohio State University, just a short drive away. We taped our show at their new Ohio Union, which was completed three years ago. We even had the most famous of all Buckeyes stop by — the one and only Brutus. Dylan got to talk to Brutus about why a Buckeye is called a Buckeye. Here’s the video:

                        

    We had a blast at the Ohio Union and met some incredible smart, motivated and cool students while we were there. Here are some more photos of the show and some folks who came to visit us. The entire set isup on our Facebook page here.

    Loving that Buckeye spirit!

    O-H-I-O!!!


    As we wrapped up, we also had a visit from OSU president Gordon Gee (@presidentgee). He had the time to have a quick chat with Dylan. Here’s the video:

                             

    After that, we found out that our flight to Chicago was cancelled due to weather.  With our fearless leader leading the way (Executive Producer Steve Friedman, of course), we hopped in a car and drove 356 miles from Columbus to Chicago. A little weather report calling for 5″ of snow isn’t going to stop us! (It didn’t end up snowing, by the way.)

    We ended our day with one quick “breakfast for dinner” pit stop at the unofficial favorite road-trip restaurant of the DR crew, Bob Evans.   Sometimes, after a long day on the road, you just need a biscuit. (And some gravy. Lots of it.)

    What’s Up Next: Today we’re in Chicago with two fantastic events. We’ll be at 57th Street Books at 11:30AM CT, and a show taping at the University of Chicago Booth School of Business at 3PM CT.Here’s the full schedule, with addresses and other info.

    We fly back to New York tonight… much too quick of a trip to Chicago, but we WILL be back!

    Here’s a list of everywhere we visited in Columbus, OH, with links to their websites. Say hi to all these great venues on Twitter!

    Book Loft of German Village - 631 S. Third St. (at Sycamore Street), Columbus, OH 43206

    Cup O’ Joe - 600 N High St (btw Russell St & Goodale St), Columbus, OH 43215 @cupojoecoffee

    The Ohio State University “Ohio Union” - 1739 N High St. (at W 12th Ave.), Columbus, OH 43210@ohiounion

    Bob Evans - 670 Brandt Pike (Rt 201), Dayton, OH 45424 @bobevansfarms

  • Tour Diary: 30 Million Jobs comes to Lexington, KY & University of Kentucky

    - by Meg Robertson, Digital Producer

    Yesterday was the first stop on the 30 Million Jobs college tour, and we were lucky enough to be hosted by the University of Kentucky — specifically, the awesome folks at the College of Pharmacy.  There’s nothing we like more than getting out of New York for a few days, and this week, we’re asking people one question when we visit schools: “what’s your experiment?”

    Now, when we come into town, we don’t only like to do the television show (although, that’s the main focus) — we also like to do meetups, book events, and visit some of the more fabled local institutions around town.  Here’s what we did around Lexington.

    We kicked off the morning with a visit to one of Lexington’s oldest diners, and a place that lives and breathes the Wildcat spirit of UK - Tolly HoThe menu alone is, well, worth coming there for.  One of us (not going to say who) may have indulged in some biscuits and gravy.  You can’t get that in NYC!
    Lexington, KY's

    Lexington, KY's

    After that, we headed on over to Joseph-Beth Booksellers for an excellent discussion on creating a culture of innovation and the 30 Million Jobs we need to kick-start our economy.  (We were joined by local reporter Greg Skilling, whose writeup of our visit to Lexington is up at the Louisville Independent Examiner.)

    To start, we had a fun breakfast with documentary filmmaker Peter Byck, who directed and producedCarbon Nation.  We talked a lot about energy, the environment, and how much people from opposite ends of the political spectrum actually agree on when it comes to ideas about a cleaner, greener America.  We’ll be featuring a clip of his documentary on the show today.
    Pre-Event lunch with documentary filmmaker Peter By

    Continue reading this entryContinue reading this entry ...

  • “Greedy Bastards” book event at 57th Street Books & Show Taping at University of Chicago

    As the 30 Million Jobs tour rolls on, we’re thrilled that we’re visiting CHICAGO on Friday, February 24th.  We’re planning two fun events that are free and open to the public — a 11:30AM event at independent bookstore 57th Street Books, and a live show taping at the University of Chicago Booth School of Business, from 3-4P CT.   We hope to see you there if you’re in the Chicago area!

    57th Street Books Event
    TIME: 11:30A – 12:30P CT
    LOCATION: 1301 East 57th Street Chicago, IL 60637 (Google Map)
    ABOUT: At one of the Chicago’s best independent book stores, Dylan will talk about his book Greedy Bastards and lead a discussion on fostering a new culture of innovation in America. This will followed by a Q&A/discussion and a book signing. NOTE: For more information or for directions to 57th Street Books, visit their website or call (773) 684-1300.

    UNIVERSITY OF CHICAGO: LIVE SHOW TAPING
    TIME: 3-4PM CT
    LOCATION: University of Chicago Booth School of Business
    5807 South Woodlawn Avenue Chicago, IL 60637 (Google Map)
    ABOUT: Attend a live show taping of The Dylan Ratigan Show. Students are encouraged to come, but this taping is open to the public. NOTE: Dylan will likely not be available for a meet-and-greet after this particular taping due to our travel schedule.  If you’d like to say hi, please try to attend our book event.

  • "Summon the Experiments!" Ratigan Tells Jimmy Fallon

    On Thursday night, Dylan visited the new king of late-night, Jimmy Fallon, to show an American-made lightbulb (from FireFly LED Lighting, an Austin, TX-based company) that lasts for 30 years and is 90% efficient. Dylan used the lightbulb as one example of millions of new experiments and innovations that are going to be needed in order for this country to prosper.

    Dylan asked Jimmy to summon America’s youth to seize the joy of experimentation so that we can keep up in a world that’s changing faster than ever.  You can watch the full segments here:


    For more on Late Night With Jimmy Fallon, visit their website, or follow Jimmy on Twitter@JimmyFallon.

  • Ending the Stranglehold of the Prison Industrial Complex on America

     

    Criminologist David Kennedy and author of “Dont’ Shoot: One Man, A Street Fellowship, and the End of Violence in Inner-City America,” former NAACP directorBen Chavis, and Russell Simmons, chairman of Rush Communications and founder of globalgrind.com, joins MSNBC’s Dylan Ratigan in Austin, Texas to talk about the failed War on Drugs and how the underlying problems of the Texas prison system.

    As Dylan explained on the show:

    “This segment aimed at one idea. The war on drugs is a monumental failure by any measure. Drug consumption, cost, this failed experiment has turned into a breeding ground for a prison system that is based on racism. An african-american is ten times more likely to be incarcerated for the exact same drug crimes as a white American. In order to keep this drug war alive, we are paying an astronomical price,” said Dylan.

    “The cost of incarcerating 150,000 prisoners is $3.3 billion in 2010. And yet prescription drugs, pills, marijuana, are more prevalent in our society than ever. It is time to start treating drugs for what they are — a massive public health crisis, and funnel those wasted billions of dollars toward real reeducation and using people in the human capital that we are destroying in our society to harness and release it in our goal to create 30 million jobs.”

    Criminologist David Kennedy, former NAACP director Ben Chavis, and Russell Simmons, founder of globalgrind.com, joins MSNBC's Dylan Ratigan in Austin, Texas to talk about the failed War on Drugs and the underlying problems of the Texas prison system.

     

    Here’s a full transcript of their conversation:

    DYLAN: You have a lot of endorsements around you that are emerging around your  methodology. Give us some insight into exactly what it is you have been doing so that we can better understand it.

    DAVID KENNEDY: So I work in some of the most desperate neighborhoods in the country. They are largely very historically damaged African-American neighborhoods. They have all kinds of issues and problems we need to pay attention to. There are a couple of things that are not part of the usual historical fabric that we’ve been dealing with that are doing tremendous damage. These are neighborhoods where if you are a young black man, one in 200 of you in some of these communities are killed by gunshot every year. They are neighborhoods that are driving the core American reality, which is that if you’re a black man, one in three of you will go to prison.

    DYLAN: So, tell us what you’re doing.

    DAVID KENNEDY:  It’s not okay. Neither one of these things is all right. And what turns out to be true is that the community doesn’t think it’s okay. The guys on the corner don’t think it’s okay. Law enforcement doesn’t think it’s okay. Hardly anybody is driving the problem. It’s 10% of the 5% of the young men on the streets at the core of this violence. And those parties, the community, law enforcement, community service, all over the country they are getting together and sitting down face to face with the 10% of the 5%.  They are saying we know who you are and what you’re doing, we all care about you. None of us want you dead or locked up. There’s a couple things you’re doing that has to stop. And we want to engage with you so we don’t have to bury you and we don’t have to lock you up.

    DYLAN: What have your results been?

    DAVID KENNEDY:  You get the absolute elimination of street drug markets. You get 40-60% reductions in homicides in these neighborhoods. You get dramatic improvements in the lives of these guys that everybody is giving up on. It’s pretty remarkable.

    DYLAN:  Russell, when you hear David and see the endorsement from a conservative West Texas oil man, you see the endorsement from one of the cofounders of the Tea Party Patriots, your thoughts about these ideas and the moment we find ourselves in where we can create, obviously, a potentially massive and very diverse coalition around a simple idea.

    RUSSELL SIMMONS: Well, no question that these kinds of ideas are useful — I wouldn’t even say useful, they are critical. We have to change the way we think. My experience with the drug laws growing up, all my friends died and went to jail. And I saw the damage that drugs did.

    But it wasn’t the drugs so much, it was the war on drugs. A lot of my friends were diseased. Some grew out of it. Some were in prison. Most grew out of it. Some were in prison. And the ones who went to prison diseased came home criminal. And the cycle of these people going in and out created criminal, prison culture in the streets. And it damaged whole communities.

    So we took diseased people and we put them back into communities as criminals and changed community’s fabrics.  That’s an ongoing problem. That cycle of in and out of jail. We found that it’s not helpful in terms of eliminating crime. In fact, it’s the core of crime. The creation of crimes. That’s the problem we’re discussing.

    So to have a solution like this that’s researched and ready to go and to ignore it, there’s only one reason for that. It’s because the prison industrial complex makes so much money incarcerating these people. So as long as they pay politicians to keep the laws on the books, I have had the experience of fighting these laws, I have had the experience of going to work with people who cared and finding out that even if the politicians cared, the ones who were in debt to the complex never voted or raised their voice to change the laws. We know this is a failed drug war. We know people are going to jail and not threatening to our community. We know that when they come home, they will be a threat to our communities. We have to make a change.

    DYLAN: Listen. There’s a remarkable amount of logic. There’s an increasingly broad basis of support. You have a man sitting next to you who has been living his life solving these problems in a way that has been giving demostratable success. We see what the barriers are — the money in politics, the profitablity of the prison industrial system.  All of these aspects, Ben. What is it that we have to do next in order to give not only David more resources, but to truly elevate the necessary pressures to eliminate the stranglehold that the prison industrial complex has taken on our the way we govern country?

    DR. BEN CHAVIS:  David is definitely on the right track. What Russell is referring to in terms of experience, we built a grass roots movement to finally reform and change the Rockefeller drug laws. We are here at the LBJ Library — LBJ signed the Civil Rights Act, signed the Voting Act because of the Civil Rights movement — a grassroots movement. That’s what Occupy the Dream is emerging. We’re getting the black church reengaged.  We’re going to challenge these issues. Take the research and the study that David has done, but you’ve gotta involve the participants.  You’ve got to involve people in the community.  We’re changing consciousness.

    We have to get money out of politics. We’ve got to have the constitutional amendment. We have to deal with providing the 30 million jobs. We have to involve more than 30 million to people to create the 30 million jobs. We’re on board. We have to work hard. We have to deal with green energy. At the end of the day, that’s what I’m here in Texas for.  We’re going to meet tonight and we’re going to build this movement.  We’re going to turn this situation around from the bottom up.

    DYLAN:  And if you were to look at — what is it that you need the most right now, David, to do more of this?

    DAVID KENNEDY:  I need him. [points to Dr. Chavis]

    DYLAN: Ha ha… I think you got him!

    RUSSELL SIMMONS:  Let me interject. What Ben is saying is important about the black church. It’s the union between the black church and the unions and the black church and the Occupy Wall Street people going together for Occupy the Dream.

    This is a historical thing in that there’s a collaboration that’s going to make the difference. And again, it’s not only the black church and the unions, it’s the Tea Parties. It’s the people on the right. This is not a conservative or a liberal or progressive issue. This is an American issue.

    We’re talking about people who spend $15 million to get billions out of our system. $3.3 billion in Texas alone. Just for the little bit of lobbying money. For the politicians, they can’t help it. The money out of Washington is so critical. They are paying to keep those laws on the books. It’s a small amount they are paying. But the return on their investment is too large to turn our head on and we have to change this.

    DYLAN:  And to that end, when you look at Tim Dunn, who is a west Texas oil man, a conservative in this country, you look at Mark Meckler, who is a conservative in this country and a founder of the Tea Party Patriots.  You don’t need a greater understanding that this is not a left or right issue than to understand the intensity of your support and the intensity of Russell’s support and the intensity of my support and all these individuals. David, you get the last word. The world is with you if only the government understood that.

    DAVID KENNEDY:  No good American wants to live in America where we are locking up an entire people.  It’s not right. And the more people see that, the more that common sense emerges. It’s just wrong.

  • On the Mortgage Settlement: There Is No Political Solution to a Math Problem

     - 

    -  by Dylan Ratigan and Eliot Spitzer

    Originally published by Huffington Post 2/10/2012 

    http://www.huffingtonpost.com/dylan-ratigan/mortgage-settlement_b_1267710.html

    This week officials from the Obama administration, the banking regulators, and state Attorney Generals announced a settlement of claims stemming from the financial crisis. The nominal amount put forward as the cost of the settlement is $26 billion, and in return the banks will be released from civil claims on origination of mortgages and the falsification of documents in the foreclosure process, or "robosigning". This caps off a month of political noise on the housing situation which started at the State of the Union, when the president announced a task force on financial fraud headed by officials from his administration as well as New York Attorney General Eric Schneiderman.

    An investigation, and a multi-billion dollar settlement. That sounds like a lot, until you put it into perspective. Here are the numbers. Roughly half of homeowners with mortgages are underwater, which means they owe more than they own, to the tune of $1 trillion or so. And housing values are still declining so far in this "recovery", throwing more homes underwater. In terms of an investigation, the Savings and Loan crisis used roughly 1000 FBI investigators to uncover fraud -- this task force taking on a crisis forty times more severe will employ 10 FBI agents.

    There's a reason this is so inadequate to the problem at hand. For the last three years, the policy has been to impose a political solution to a math problem. It hasn't worked. America simply has too much mortgage debt to pay back. Serious economic thinkers across the spectrum, from Democrat Alan Blinder to Republican Martin Feldstein to New York Fed President William Dudley, believe that there is only one solution -- writing down the enormous creaking mound of debt. This solution is currently off the table, because writing down these unsustainable debts could cost our fragile banks enormous sums of money and possibly lead to a restructuring of one or more of our major banks. Avoiding this clear policy choice has resulted in our economy falling into a Japan-style "zombie bank" torpor, with debts carried on the books at full value which everyone knows will not be paid back at par.

    This crisis of American political economy in the form of excess mortgage debt is preventing a more powerful economic recovery. Three years after Ben Bernanke used the term "green shoots" to describe a recovering economy, job growth hasn't really revived in any meaningful way. In fact, this is by far the worst recovery we've had since the end of World War II. The best way to measure this is not through traditional unemployment indices (which can be gamed), but by asking the question of how many Americans are working as a percentage of the population. In 2007, this was 63 out of 100. Today, it's a full five percentage points lower. The ratio hasn't been this bad since the early 1980s recession, and remember, we're in a recovery. And the labor force participation rate is dropping, which is a long-term bigger crisis.

    The housing market's vicious deflationary cycle demands serious policy action to match the scale of the challenge. Dropping housing values lead to foreclosures, which damage housing values, and so on and so forth. According to Zillow, roughly half of homeowners with a mortgage are effectively underwater, which means they owe more on their mortgage than their house is worth. So far, the alphabet soup laden set of programs (HAMP, HARP, Hope for Homeowners) put forward by the Bush and then Obama administration have been failures. And this is because, as the Congressional Oversight Panel noted as far back as March of 2009, the single best predictor of default risk is how much equity homeowners have in a home. Many Americans, though considered homeowners, are essentially "renters with debt" (as housing analyst Josh Rosner put it). And Amherst Securities Laurie Goodman noted that with our current housing trajectory, we can expect up to 10 million more defaulted mortgages over the next decade. These foreclosures impacts housing values, reduce consumer purchases, and costs municipalities money.

    The proposals on the table to solve this problem aren't inspiring. The meager mortgage settlement deal cut via furious and dramatic negotiations is unlikely to be meaningful. This settlement is essentially a continuation of previous alphabet soup housing programs, because it would not force banks to fundamentally restructure the trillion dollar underwater mortgage problem. It will generate headlines, but it will fail to address the extent of the problem. State attorneys generals have accepted the settlement for a variety of reasons, one of the most frustrating being that they are substantially under-resourced and this deal moves cash their war. This is not how to make good policy. And the housing market will continue to suffer if our political leaders cannot acknowledge the depth of the problem.

    Instead, we need some serious discussion from both the Republican candidates and the Obama administration about how to write down mortgage debt. Some proposals would reduce principal, while giving the banks an equity appreciation stake in the home. Others would deal with the problematic accounting standards which allow banks to overvalue second mortgages, and imply that one or more large banks needs to be restructured by the government. These are worth considering. We think it's important, regardless of how policy-makers reduce the debt, to force the banking system to appropriately value mortgage debt.

    Anything less would simply continue the deflation and uncertainty in the housing market.

    Ultimately, we need to look at our banking and housing system and engage in a ruthless yet compassionate evaluation of whether it is working to solve our national needs. Serious thinkers in both parties recognize that it isn't, and that we should find a way to write down this mortgage debt. Only then will we head down a pathway to a healthier banking system, and begin generating the roughly thirty million jobs that will bring America back to full employment. It's time that the major presidential candidates, and President Obama himself, be honest with the American public, and openly recognize this as well.

About The Dylan Ratigan Show
Dylan Ratigan is the host of msnbc's "The Dylan Ratigan Show," an opinion and analysis-fueled daily broadcast program airing weekdays at 4pm on MSNBC. Ratigan also writes regularly for the Huffington Post and produces one of America's most insightful and provocative podcast's "Radio Free Dylan" and dylanratigan.com.
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Infuriated by government corruption and corporate communism, incensed by banksters shaking down taxpayers, and despairing of an ailing health care system, an age-old dependency on foreign oil, and a failing educational system, Dylan Ratigan sees an America that has allowed itself to be swindled and robbed. Available January 10, 2012! Read an excerpt.