In today's On the News segment: The Justice Department and the Securities and Exchange Commission filed parallel civil lawsuits against Bank of America for making misleading statements and failing to disclose facts to investors in early 2008; yesterday, the President put forward four ideas to reform the housing finance system; the default rate on student loans has tripled in the last decade; and more.
Thom Hartmann here – on the news...
You need to know this. Yesterday in Phoenix, President Obama laid out his plan to help more Americans become homeowners. In his speech, the President put forward four ideas to reform the housing finance system, which he said will "turn the page on this kind of bubble-and-bust mentality that created [the economic] mess in the first place, and build a housing system that's durable and fair and rewards responsibility for generations to come." His core principles include putting private capital at the center of the housing finance system, ending tax-payer backed Fannie Mae and Freddie Mac, ensuring the availability of 30-year fixed rate mortgages, and increasing access to affordable rental housing. Already, this plan is being met with mixed reviews. Republicans in the House of Representatives have historically called for a similar plan to reduce the federal government's role in housing, but after his speech they complained that President Obama waited too long to address the problem. Many Democrats support the president's idea of replacing Fannie and Freddie with a new federal agency to preserve 30-year fixed rate mortgages, but they're concerned about giving more power to the private-sector. According to the Think Progress Blog, there is a bipartisan consensus for the president's proposal, but the devil is in the details. They say that the only way to ensure that most Americans have the opportunity to become homeowners, is to include incentives that encourage the private market to keep home loans affordable and accessible. Owning a home provides economic security and the ability to build wealth, and it's an opportunity that too few of Americans have access to. There's still much to discuss about the President's plan, but there's no debate that we must fix the system that keeps the American Dream out of reach for so many.
In screwed news... The default rate on student loans has tripled in the last decade. There are now 6.5 million students who are unable to pay back the money they borrowed for college. To make matters worse, very few of the students who are paying loans back are not taking advantage of income-based repayment plans, which would reduce their payments and lessen the likelihood of ending up in default. According to the Think Progress Blog, many students are unaware of the "Pay As You Earn" program, and many of the now-default loans were taken out too long ago to be eligible. A spokesman from the Consumer Financial Protection Bureau said that many of the loan defaults could have been avoided, "if borrowers were aware of and able to easily enroll in income-based plans through their servicer." The enormous volume of student debt is a drag on our entire economy, and it's eroding the future wealth of college graduates. Many students and families remain frustrated, wondering why we could bail out the banks, but refuse to provide more assistance to our future leaders.
In the best of the rest of the news...
The wind energy industry is rapidly expanding in our nation. In 2012, wind installations increased by 90 percent over the previous year. And, because more wind power is available, the average price of a wind power purchase agreement down to half of what it cost in 2009. This lower cost and increased availability made our nation the global leader for annual wind-energy capacity in 2012. Federal tax incentives, and state and federal policies that promote renewable energy played a major role in the success of wind-energy, and led to a boost in domestic manufacturing. According to the Department of Energy, we're building more wind farms, but importing much less wind turbine equipment. More of that equipment is being manufactured here in the U.S., providing good-paying jobs for our fellow citizens. All-in-all, wind energy is very profitable for the renewable energy industry, and it's very good policy for our nation. New jobs, cleaner energy, and cheaper electricity prove that good science is also good business.
Our government is going after Bank of America. Yesterday, both the Justice Department and the Securities and Exchange Commission filed parallel civil lawsuits against that bank. Both agencies are accusing BOA of making misleading statements, and failing to disclose facts to investors in early 2008. Bank of America's already agreed to pay more than $45 billion dollars to settle complaints against Merrill Lynch and Countrywide, which they acquired after the 2008 economic meltdown. However, these new lawsuits involve $850 million dollars of residential mortgages that the government says were originated, securitized, and sold by Bank of America. Of course, BOA issued a statement denying any wrongdoing. Attorney General Eric Holder was asked about the lawsuit on Tuesday, and he said the Obama Administration's Financial Fraud Enforcement Task Force "will continue to take an aggressive approach to combating financial fraud and uncovering abuses in the residential mortgage-backed securities market." It may not be as good as seeing the banksters in a perp-walk, but many Americans who lost their homes are thrilled to see Bank of America finally facing some justice.
And finally... If you've ever thought that online dating sites like eHarmony and Match.com were boring, you may be in luck. It turns out that there's a whole world of more individualized dating sites to explore. Some offer the chance to meet other singles with similar food allergies, like GlutenFreeSingles.com, and others are designed to find your perfect match based on lifestyle. Now, even clowns or Amish people can find an online love match, and cat lovers can connect with potential spouses that appreciate their furry family members. If those unique sites don't quite fit your needs, you can find fellow singles that share your love of hot sauce, uniforms, or furry costumes. They say that there's someone out there for everyone, and apparently that includes people who want to meet an inmate, or those who like to wear diapers. Happy hunting...and keep an eye out for Congressmen.
And that's the way it is today – Wednesday, August 7, 2013. I'm Thom Hartmann – on the news.