CPD IN THE NEWS

Huffington Post - October 9, 2014, by Richard Eskow - Progressives who are elected to executive office have a unique opportunity to highlight neglected issues and stimulate much-needed debate, by taking actions which challenge the "conventional wisdom." They can change the political landscape by employing a principle that might be called "leadership by example."

The mayor of New York City is uniquely positioned to play this role, thanks to that city's prominence, and so far Bill de Blasio has done exceptionally well at it. Two of his actions -- on education and assistance to the poor -- deserve particular commendation, because they challenge the "bipartisan" consensus that has too often strangled open debate and left the public's interests unrepresented.

Action for the Impoverished

1. "Welfare Reform's" Record of Failure

"Centrist" Democrats like Bill Clinton, together with Republicans like Rudy Giuliani and Michael Bloomberg, have long sung the praises of "welfare reform" -- a set of policies that promised to turn welfare recipients into "productive citizens" through a combination of educational programs, work requirements, and "tough love" that denied benefits to some of them.

Clinton signed the "Personal Responsibility and Work Opportunity Reconciliation Act" on August 22, 1996, saying it would "end welfare as we know it and transform our broken welfare system by promoting the fundamental values of work, responsibility, and families." That bill quickly became a symbol of "bipartisan consensus" and a much-touted piece of model legislation for the neoliberal economic agenda.

Unfortunately, we now know that it didn't work. In fact, it backfired. A report from the University of Michigan's National Poverty Center showed that extreme poverty increased in the United States by 130 percent between 1996 and 2013 -- and pinpointed "welfare reform" as the cause.

Despite its documented failure, the myth persists that "welfare reform" succeeded. This belief has so far proved resistant to the mounting evidence against it, perhaps because it serves the personal interests of wealthy individuals and corporations who don't care to be taxed for antipoverty programs.

This "reform" myth also serves to assuage their consciences. Politicians like Cuomo and Clinton are all too happy to help in that effort by assuring wealthy Americans that this policy is smart, even liberal, and that it only coincidentally happens to benefit them personally.

2. The End of Welfare As They Know It

The mayor of New York City cannot supersede a federal law, but a recent executive action will hopefully serve to re-open the debate on welfare "reform." De Blasio ended the policies of his GOP predecessors and eased requirements for welfare eligibility in New York City. New rules will give young people more time to complete their educations, and native speakers of foreign languages time to learn English. He also cut back on some "workfare" requirements (which in some cases amount to little more than ritual humiliation.)

For the first time, allowances will be made for parental duties, travel time, and other obstacles which are faced every day by the poor -- but which are little-understood by prosperous "bipartisans" from either party.

As a de Blasio official explained, "we have the data to show that toughness for the sake of toughness hasn't been effective."

3. Data Driven

Data. That word is anathema to "centrist" politicians and commentators who claim to be technocrats, but who are actually driven by ideology, donor cash, or both. When de Blasio issued his orders the hyperventilation was, predictably, all but instantaneous. "We don't need to guess how de Blasio's welfare philosophy will pan out," wrote Heather McDonald, who is "Thomas W. Smith Fellow at the Manhattan Institute."

Reihan Salam fulminated in Slate that welfare programs must "rest on a solid moral foundation. And that, ultimately, is what work requirements are all about."

But when the work isn't available, or people have no practical way of obtaining it, it's immoral to make them -- or their children -- suffer. By ending the inhumane but "bipartisan" policies of his predecessors, Bill de Blasio has potentially re-opened the debate on the draconian and failed "welfare reform" concept.

Action on Education

1. Charter Schools Are "Special Interests"

De Blasio's much-publicized struggle with charter school CEO Eva Moskowitz began when he overturned Bloomberg's decision to give her "Success Academy" free space in city buildings. That led her to make a series of false claims about her organization's accomplishments -- claims that were effectively debunked by Diane Ravitch and Avi Blaustein. Success Academy students aren't the best in the state, they aren't the most difficult students in the city -- and the program is so cost-inefficient that it spends over $2,000 per year more per student than other schools serving similar populations.

Bloomberg was generous to Moskowitz because her program suited his predilection for Wall Street-friendly, corporate-cozy ideas -- ideas which appeared on the surface to promote innovation or "reform," but which on further study reveal themselves as a wealth transfer from the many to the few, often at the expense of the public good.

That's exactly what the charter-school movement represents. Sure, it sounds like a good idea: Schools will "compete" for students, and those which offer the best "products" will succeed. As writer and education activist Jeff Bryant says: Everybody loves "choice," right?

But the concept is flawed at its core. Schools aren't failing because students and their parents don't have "choices" in schools. They're failing -- to the extent they are, because even that concept is overhyped -- because they don't have choices in jobs or housing. Schools are struggling because we don't pay teachers well enough, because we underfund our school districts, and because social factors (especially poverty) inhibit the learning process.

2. Rockets to Nowhere

For all the hype and all the money, there's still no evidence that charter schools work. Advocates love to claim that "school choice" offers lower-income children a way out of poverty. But Milwaukee, which the conservative American Enterprise Institute calls "one of the most 'choice-rich' environments in America," remains one of America's 10 most impoverished big cities.

And kids aren't any more educated in Milwaukee than they were before they were given all this "choice." Educator Diane Ravitch reviewed the data and found that, 22 years after the program was implemented, there was no evidence of improvement in students' test scores.

The Economic Policy Institute (EPI) reviewed the "Rocketship" program, which has bid to take over Milwaukee's underperforming schools, and found that it isn't working. They observed that "in 2012-2013, all seven of the Rocketship schools failed to make adequate yearly progress according to federal standards."

Call it "failure to launch."

3. Follow the Money

The EPI also noted that "Blended-learning schools such as Rocketship are supported by investment banks, hedge funds, and venture capital firms that, in turn, aim to profit from both the construction and, especially, the digital software assigned to students."

That might help explain why wealthy Wall Street investors paid Moskowitz's $2,000-plus-per-student cost overruns out of their own pockets. The same hedge funders also happen to have donated at least $400,000 to Andrew Cuomo's reelection campaign. Perhaps coincidentally, Cuomo led the charge against de Blasio after he moved to end Moskowitz's taxpayer-funded privileges.

Charter schools are an ideological and investment opportunity, which explains why enormous sums of money have been expended promoting them. (The latest effort, funded by $12 million from the wealthiest families in the nation, is something called "The Education Post."

Not all charter schools are driven by the profit motive, and some may in fact do a good job. But there is no evidence to support their claims, their operating principles, or the broader "free market" ideology behind them -- an ideology that is founded on hostility to government itself.

4. Breeding Fraud

Ravitch also notes that Washington, D.C., whose "Opportunity Scholarship Program" launched at least one educational celebrity career, was equally unable to demonstrate results. Its final-year report notes that "There is no conclusive evidence that the OSP affected student achievement."

There is conclusive evidence, however, that the charter school movement has produced at least one fairly widespread outcome: fraud. A recent report from the Center for Popular Democracy, Integrity in Education, and ACTION United told the story. The report, titled "Fraud and Financial Mismanagement in Pennsylvania's Charter Schools," showed that the state had failed to properly audit or review its publicly-funded charter schools.

It also uncovered a pattern of abuses so disturbing it makes charter schools look like petri dishes for fraud. The director of one charter school diverted $2.6 million in school funds to rebuild his church. Another stole $8 million for "houses, a Florida condominium, and an airplane." Yet another used taxpayer funds to finance "a restaurant, a health food store, and a private school." A couple stole nearly $1 million for their personal use.

There are more revelations in the report -- and it only covers one state.

And yet, despite mounting evidence to the contrary, charter schools continue to be talked up by Bill Clinton, whose recent boosterism was described by Salon's Luke Brinker as "stunning" in its variance with the facts. (Jeff Bryant has more on the reality behind Clinton's disingenuous remarks.)

5. The Ongoing Battle

De Blasio acted wisely in moving to end Bloomberg's gift of scarce New York City school resources to Moskowitz. He was ultimately forced to back down, at least in the short term, after her big-dollar backers won a victory in Albany.

That was no surprise, given the money behind the so-called "reformers." But it's not the end of the story, either. De Blasio's position on charter schools triggered a fierce response -- but it also triggered a long-overdue conversation.

By challenging the conventional wisdom on charter schools, Bill de Blasio has started something their backers didn't want: a genuine debate on their merits. He may have lost a battle, but if the debate continues he's likely to win the war.

Leadership Through Action

By taking actions which challenge the orthodoxy of his own party's corporate wing -- an orthodoxy shared and taken to extremes by the entire GOP -- Bill de Blasio is changing the political landscape. Although he is reportedly close to the Clintons (he managed Hillary's 2000 senatorial campaign), his executive decisions are offering a new political vision for progressives who have felt starved for representation in the two-party system of recent decades.

De Blasio's deeds haven't been limited to education and welfare, of course. As we've discussed elsewhere, he's taken on issues that range from the minimum wage to the environment, and to housing as a human right.

He's made mistakes, and he's all but certain to make more as he navigates difficult political waters. De Blasio's trying to effect change from within the political process, which is always a risky endeavor. But he's made great strides in a short time. His is the sort of leadership which can change the national political landscape even as it improves the quality of life for his constituents.

Bill de Blasio is using his position as mayor of New York to lead -- with action as well as words. And for that he's owed a debt of gratitude.

Source

Yet it’s hard to escape a vague sense of unease. The swoon that began a week before last was quickly attributed, at least in part, to China’s economic problems. Just as quickly, many investors and policy makers concluded that China’s leaders would manage those problems in ways that would allow the global economy to chug along. But what if they don’t? A prolonged slowdown is more likely to provoke social unrest in China than in other developed economies, because stability there has been based on high growth rather than political and other institutional arrangements. The prospect of social unrest, in turn, raises economic and national-security concerns not raised by economic crises elsewhere.

Closer to home, market volatility has significantly reduced the odds that the Federal Reserve will begin to raise interest rates at its next meeting in mid-September. A delay is nothing to lament, because the still significant slack in the labor market would make an increase this year premature. The Fed has generally played down the potential impact of China and other international headwinds, while asserting that the negative effects of low oil prices and a strong dollar were likely to be temporary. But these forces are proving potent and long lasting — further reason to give the Fed pause.

Renewed stock market downdrafts could disrupt the economy, and the Fed’s plans, in other ways. The recovery in housing is an important gauge of economic health. But this year, the big increases in sales and prices have come at the high end of the market, where investment wealth is assumed to be more of a factor in the decision to buy than wages and salary. The very real possibility is that if the stock market falters again, so too will the housing market.

Economic fundamentals today are no different than they were before the market took a walk on the wild side. Inflation is well below the Fed’s target of 2 percent. Unemployment is still higher than it was before the last recession and wages have shown no signs of rising. The economy is being propelled forward by consumers and other advantages, and being held back by insufficient government spending and other disadvantages.

It all works out to an economy growing at 2.5 percent. At that modest pace, the United States cannot be of much help if other economies falter. But it can rebound from a market swoon, at least for now.

Source: New York Times

The protesters who cornered Flake just before he voted on Kavanaugh's confirmation spoke out about why they did it.

Read the full article here.

The controversial federal program that clouded the HUD secretary's VP prospects gets a timely overhaul.

Julian Castro’s Housing and Urban Development Department announced significant changes Thursday to a federal program that sold delinquent mortgages to private investors — a move that mollified progressive critics who threatened to undermine his vice presidential prospects.

With three weeks remaining until the Democratic convention and Hillary Clinton’s campaign narrowing down its list of potential ticket mates, the U.S. housing agency said it is changing a controversial program to give delinquent homeowners a new chance to reduce the principal they owe on their mortgage. The changes also prohibit financial firms from giving up on trying to sell or recuperate decrepit properties the businesses would rather walk away from.

As HUD secretary since 2014, Castro had been under attack from by at least 11 Latino and populist groups for his oversight of the department’s “distressed asset stabilization program,” which sold struggling homeowners’ mortgages to hedge funds. Castro, they alleged, failed to deliver on a HUD promise to sell more mortgages to non-profit community groups instead of financial firms.

Started in 2012, the program’s two stated objectives are to help struggling residents while also clearing billions of dollars of bad debt off the agency’s books. But liberals have argued the program undermines homeowner protections, especially for people in low-income neighborhoods, as HUD sold mortgages to the same financial firms that exploited borrowers in the lead-up to the 2008-2009 recession.

The changes came not long after Castro surfaced on Clinton's short list of vice presidential candidates — along with Sens. Tim Kaine and Elizabeth Warren — leading to immediate speculation about the HUD secretary’s political motivations.

Warren was among those calling for major reforms to the program.

 “Given that Secretary Castro has only spent a brief time on the national stage, the black mark caused by the distressed asset issue stands out prominently on his record,” said Isaac Boltansky, director of policy research for Compass Point Research & Trading in Washington. He covers housing policy.

“There is no question that the left’s attack of this program generally — and Secretary Castro specifically — lowered the odds of him being tapped,” he said.

As severely-delinquent mortgages accumulated after the recession, the Federal Housing Administration, a division of HUD, needed to reduce debt liabilities to the government.

Under the program, delinquent loans held by banks but insured by the FHA are sold to new buyers, including hedge funds, private-equity firms and non-profit community groups. Through May 2016, HUD sold more than 105,000 FHA-insured loans valued at $17 billion, according to a report by the National Consumer Law Center.

Castro has not said much publicly about the program, which in recent weeks erupted into a politically-charged issue for the Obama administration, said sources with familiar with the situation.

The program was supposed to give struggling homeowners another chance to avoid foreclosure. But researchers following the program said that financial companies have used it to circumvent homeowner safeguards.

“If you have an option of selling your loan through [the] DASP, then you don’t have to go through state foreclosure procedures that have the consumer protections in them and actually help enforce FHA rules,” said Geoff Walsh, author of NCLC’s report. He previously worked as an attorney with Vermont Legal Aid, Inc. and specialized in housing, consumer and bankruptcy areas. “A lot of damage has been done,” he said.

The liberal groups held Castro responsible for the program’s flaws, even though it started before his tenure at HUD. But the groups immediately applauded HUD’s new changes to the program that they had advocated for.

Their website attacking Castro was still live on Friday, though it will be updated to reflect HUD’s changes, said Matt Nelson, managing director of Presente.org, which claims to be the largest U.S. online Latino organizing group.

Housing experts acknowledged that pressure from advocacy groups — which used the issue to question Castro’s progressive credentials — played a role in the revisions.

“But for his potential to be vice president, these changes probably don’t get made,” said Edward Gorman, head of community development for the National Community Reinvestment Coalition, whose members include nonprofits that buy DASP loans.

“It was the specific targeting of the secretary on this issue and the gathering of liberal senators in support that caused the [Obama] administration and the secretary particularly to take another look at this issue,” he said. “This will be fodder for Republicans. This will become a political issue.”

For Castro, it had already metastasized into an issue that clouded his vice presidential prospects. Widely regarded as one of the Democratic Party’s rising Latino stars, the former San Antonio mayor was targeted by a coalition of activist groups that recognized the leverage afforded to them by a presidential primary fight colored by questions about Clinton’s ties to Wall Street and Bernie Sanders’ populist, anti-Wall Street rhetoric.

“HUD has continually enhanced the DASP program by making improvements before every sale since 2014,” an agency spokeswoman said in a statement. “As a result, tens of thousands of families have been able to remain in their home or avoid foreclosure through the program.”

Maurice Weeks, a housing staffer at the Center for Popular Democracy, one of the groups supporting the attack on Castro’s handling of the DASP, said he is grateful to see the changes HUD announced. But his group will want to make sure the changes actually result in better conditions for communities.

“It became a political problem for Castro since he’s the head of that department,” Weeks said. “We didn’t set out to determine if Castro was a good VP candidate or not. Our focus was on homeowners across the country.”

By PATRICK TEMPLE-WEST

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