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Wednesday, 16 May 2012
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Student-loan debt-collection agencies garner criticism
Joshua Mandelman made $454,000 in a single year as a student-loan debt collector — more than twice the pay of the U.S. secretary of education.
His boss, Richard Boyle, CEO of Educational Credit Management Corp., received $1.1 million in 2010, including commuting expenses from his ranch in New Mexico to EMC's headquarters and to offices in Indianapolis and Sacramento. Five other ECMC managers each took home more than $400,000.
ECMC, a Minnesota-based not-for-profit group, owes its success to an 18-year-old agreement with the U.S. government. The company charges fees to borrowers and earns commissions from taxpayers — totaling as much as 31 percent — when it collects on defaulted student loans. Those rich rewards, which are approved by Congress, are sparking criticism that ECMC and similar collection agencies are reaping a bonanza from former students’ pain.
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Monday, 14 May 2012
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New super PAC hopes to woo younger voters to Republican side
President Barack Obama counted on the support of younger voters four years ago. Now, a new Republican-leaning "super" political committee wants to bring them to the Republican Party's side.
Crossroads Generation, a new super PAC — an independent committee that is allowed to raise money in unlimited amounts in support of candidates — formed with the help of a handful of established Republican groups, is tapping into the economic frustrations of under-30 voters facing dim job prospects, crippling student loans or the prospect of having to move back home with their parents.
Starting Monday, the PAC is launching a $50,000 social media ad campaign targeting younger voters in eight swing states, including Ohio and Virginia. Their ultimate goal: woo younger Americans to the Republican side, including some who supported Obama in 2008.
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Sunday, 13 May 2012
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Investment, the Engine of U.S. Prosperity, Is Underrated
Proponents and opponents of income redistribution differ greatly in their explanations for the success of the U.S.
Opponents argue that the discovery and commercialization of innovation are no different than any other investment. Investors must risk capital to fund failures. The potential payoffs provide the incentive to suffer the losses.
Those who favor income redistribution point to the steadiness of long-term economic growth as evidence that innovation bubbles up randomly in the normal course of business. They emphasize culture, claiming that Americans are eager to take risks regardless of the incentives, while Europeans and the Japanese are reluctant. Economists with these views see minimal costs from redistributing income from wealthy investors to poorer consumers.
Opponents of income redistribution worry that higher taxes water down incentives and that redistribution slows the accumulation of capital, especially risk-bearing equity.
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Thursday, 10 May 2012
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Bernanke: even worthy borrowers can't get mortgages
(Reuters) - Banks have become so restrictive in making mortgages that many worthy home buyers are being frozen out of the U.S. housing market, and lending practices are not likely to loosen any time soon, Federal Reserve Chairman Ben Bernanke said on Thursday.
Speaking via satellite to a banking conference in Chicago, Bernanke highlighted ongoing problems in mortgage finance availability, even though banks are much healthier now as the 2007-2009 financial crisis has receded.
"To be sure, a return to pre-crisis lending standards wouldn't be appropriate," Bernanke said. "However, current standards may be limiting or preventing lending to many creditworthy borrowers."
Lax lending practices, including "liars' loans" handed out to borrowers who provided little or no documentation for jobs and incomes, have been cited as a key contributing factor in precipitating the severe financial crisis.
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Wednesday, 09 May 2012
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U.S. House votes to renew Ex-Im Bank, boost credit cap
WASHINGTON (Reuters) - The House of Representatives on Wednesday voted to renew the U.S. Export-Import Bank's charter until September 2014 and gradually raise its lending cap to $140 billion, disappointing conservative groups who want the nearly 80-year-old bank to die.
The bill now goes to the Senate, which is under pressure to approve the legislation before the Ex-Im Bank's temporary charter expires on May 31.
President Barack Obama's administration had pushed for a four-year renewal, but supports the House bill.
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