Economy

The foreclosure scandal probe is now being investigate by all 50 states:

Regulators from all 50 states are launching a coordinated investigation into possibly "deceptive" and "unfair" foreclosure practices that may have illegally evicted families from their homes.

A bipartisan group of state attorneys general from 49 states and financial regulators from 39 states will work together to comb through foreclosure filings and documents from mortgage servicers to see if any state laws have been broken in the rush by services to kick borrowers out of their homes without following various state and local laws.

Of course it’s only national in the sense that all 50 states are looking into it. Congress and the White House don’t seem the keen on the idea. I guess it has something to do with “biting the hand that feeds you”. Is it any wonder the approval ratings are in the crapper?

We hear it from Republicans all the time; “if a company has more money then they will hire”. It’s the basic premise they use to sell their plans for tax cuts. But the problem is that Republicans are dead wrong, and that is shown in this article:

For months, companies have been sitting on the sidelines with record piles of cash, too nervous to spend. Now they're starting to deploy some of that money - not to hire workers or build factories, but to prop up their share prices.

Sitting on these unprecedented levels of cash, U.S. companies are buying back their own stock in droves. So far this year, firms have announced they will purchase $273 billion of their own shares, more than five times as much compared with this time last year, according to Birinyi Associates, a stock market research firm. But the rise in buybacks signals that many companies are still hesitant to spend their cash on the job-generating activities that could produce economic growth.

And for some very basic economics; the kind you learn in high school:

Some companies are buying back shares partly because they don't want to invest in developing new products or services while consumer demand remains weak, analysts said.

It has been a growing problem in this nation for decades and it continues to increase every year – income disparity:

The income gap between the richest and poorest Americans grew last year to its widest amount on record as young adults and children in particular struggled to stay afloat in the recession.

The top-earning 20 percent of Americans - those making more than $100,000 each year - received 49.4 percent of all income generated in the U.S., compared with the 3.4 percent earned by those below the poverty line, according to newly released census figures. That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly double a low of 7.69 in 1968.

A different measure, the international Gini index, found U.S. income inequality at its highest level since the Census Bureau began tracking household income in 1967. The U.S. also has the greatest disparity among Western industrialized nations.

The census also shows that those making over $180,000 a year (the top 5%) saw an increase in income last year, while those making less than $50,000 saw their income decline. Like wise lower-skilled adults from 18 to 34 saw the largest increase in poverty levels last year.

A new report out by the CBO finds that the stimulus most likely saved this country:

President Obama's much-maligned economic stimulus package added as many as 3.3 million jobs to the economy during the second quarter of this year, and may have prevented the nation from lapsing back into recession, according to a report released Tuesday by the non-partisan Congressional Budget Office.

In its latest quarterly assessment of the act, the CBO said the stimulus lowered the unemployment rate by between 0.7 and 1.8 percentage points during the quarter ending in June and increased the number of people employed by between 1.4 million and 3.3 million. The higher figure would come close to making good on Obama's pledge that the act would save or create as many as 3.5 million jobs by the end of this year.

The CBO said the act also increased the nation's gross domestic product by between 1.7 percent and 4.5 percent in the second quarter, indicating that the stimulus may have been the primary source of growth in the U.S. economy. The Commerce Department estimates that GDP grew 2.4 percent in the second quarter, a figure many economists expect to be revised lower in a report due out Friday.

Since the stimulus passed, Republican leaders, like John Boehner, have jumped in front of the cameras at any chance to say it was a failure. These numbers sure don’t look like a failure to me. As matter of fact, they would probably be much higher if we could have had a bigger stimulus passed. Sadly Republican obstructionism wouldn’t allow that.

Elizabeth Warren has been one of the most sound voices during this financial crisis. Republicans and Democrats have both looked up to her analysis of the problems plaguing our economy and have touted her as one of the brightest minds when it comes to economics.

Tim Geithner – not so much.

So this story should come as no big shock to those that follow the soap opera filled world of economics:

Treasury Secretary Timothy Geithner has expressed opposition to the possible nomination of Elizabeth Warren to head the Consumer Financial Protection Bureau, according to a source with knowledge of Geithner's views.

The financial reform bill passed by the Senate on Thursday mandates the creation of a new federal entity charged with protecting consumers from predatory lenders.

But if Geithner has his way, the most prominent advocate for creating the agency may not be picked to lead it.

The last thing we need is someone heading another economic unit of the federal government, who will fall into the “good ole’ boys club”. We need differing views and opinions, because that is the basis for the best ideas. To me that is an awesome reason to give Warren the job. Let the powers disagree and argue it out. Then we might start getting sound policy to turn this train wreck around.

That’s what leading economists are saying (via Cesca):

The recovery is shaping up to be stronger than expected and there is little risk the economy will slip back into a recession, according to USA TODAY's quarterly survey of 46 leading economists.

Yet most still say the rebound will fall short of the sharp, V-shaped upturns that often follow severe slumps, and the 9.7% jobless rate will fall slowly.

As the Fed meets to assess the economy this week, seven in 10 economists say they're more optimistic than they were three months ago.

"I think we've gotten to a point where it's a self-sustaining recovery," says Standard & Poor's chief economist David Wyss.

Even Joe Scarborough is going on about the economy improving this morning. This kind of news will really help Democrats out this fall, especially if you tie it to the Republicans filibustering financial reform. Then you can also add the countless sound bites of Republicans saying “get rid of the stimulus” and you got a big winning campaign for the Democrats. Now we only need the powers to be to seize on all this news and inform the American people of what is happening.

From a Washington Post breaking email alert:

Sales at U.S. retailers rose more strongly than expected in March as consumer stepped up purchases of vehicles and wide range of goods, government data showed on Wednesday, suggesting a broadening of the manufacturing-led economic recovery.

The Commerce Department said total retail sales jumped 1.6 percent, the largest increase since November, from an upwardly revised 0.5 percent rise in February. Sales in February were previously reported to have gained 0.3 percent.

I wonder how much of this is because of people getting back larger tax refunds this year? It would play into the fact that more middle class Americans will be more willing to spend their money than the top 2%. It also would be another indicator that the stimulus is working.

They finally reached the remaining miners in West Virginia and the outcome was not good. Last night they finally reached the final four missing miners and all were dead. This now makes the disaster at Big Branch the worst mining accident in nearly 4 decades, and one that could have been adverted.

We have heard a lot this week about the countless safety violations that have piled up against Massey Energy, including in the days and hours leading up to the disaster. Massey boss Don Blankenship was a strong opponent of safety regulations and even thought he could pick and choose what laws to follow.

As much as I hate to politicize a disaster like this, it must be done to hopefully prevent repeat incidents in the future.

Don Blankenship was the epitome of right wing beliefs, so much that he was a big donor to the Tea Party. He was totally against government regulation and 29 innocent workers have paid the ultimate price for that ignorance.

This is the second time this year that we have been given a disastrous reminder that government regulations save lives. I posted the first last month: