Wonkbook: Trade deficit up; $3 bill for jobless homeowners; climate fight moves to states
The latest trade deficit data provides yet another unwanted data point that the recovery is slowing; the Obama administration is spending $3 billion to help unemployed homeowners stave off foreclosure; when considering the Obama administration's challenge in the midterms, consider that a majority of Americans don't know that it was George W. Bush who signed TARP; and statewide initiatives against climate change are being tested in 19 elections.
Welcome to Wonkbook.
The trade deficit widened to $49.9 billion in June, reports Neil Irwin: "Ask some of the more optimistic forecasters out there where they see economic growth coming from in the years ahead, and a frequent answer is trade. Higher exports (and a more favorable overall trade balance) should drive job creation, simultaneously helping the U.S. recover more quickly and helping to right long-standing imbalances in the world economy...It seems like every data point that has come out lately has been disappointing, and this is one more in the line."
A large majority of Americans don't know that George W. Bush signed TARP into law: http://bit.ly/9CoZ4n
The Obama administration is providing $2 billion through states, and $1 billion federally for unemployed homeowners, report Nick Timiraos and Meena Thiruvengadam: "The Department of Housing and Urban Development will provide bridge loans to help unemployed borrowers who are delinquent on their mortgages...The initiative, modeled after existing state programs, will offer interest-free loans of up to $50,000 for eligible borrowers to be used to make mortgage payments for up to two years."
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Nineteen gubernatorial elections feature disputes about state-level climate action, reports Darren Samuelsohn: "Nowhere is the battle more intense than in California, where Democratic Attorney General Jerry Brown and Republican Meg Whitman are at odds over the state’s landmark law to reduce heat-trapping emissions to 1990 levels by 2020. Whitman favors a one-year suspension of the law, known as AB 32, to give the state’s economy time to recover from the recession."
British dance-pop interlude: Hot Chip play "Ready for the Floor" live.
Still to come: Home prices are up due to the housing tax credit; green jobs aren't globalization-proof; up to one in twelve American children are born to undocumented immigrants; Scott Pilgrim the comic.
The home price bump caused by the homebuyers' tax credit may be shortlived, reports Nick Timiraos: "Economists have warned that the gains could prove fleeting if a faltering economy saps demand and if the pace of foreclosures rises. Signs of a slowing market are already evident. Newly signed contracts plunged in May and haven't rebounded since. Those lower sales levels won't be reflected until July because it takes one or two months for sales to close. As inventories of unsold homes rise, many economists see home prices declining later this year."
Employers are filling open job positions unusually slowly: http://bit.ly/av3E1O
Many delinquent mortgage-holders may not have to pay more than 10% of their loan back, reports David Streitfeld: "'When houses were doubling in value, mom and pop making $80,000 a year were taking out $300,000 home equity loans for new cars and boats,' said Christopher A. Combs, a real estate lawyer here, where the problem is especially pronounced. 'Their chances are pretty good of walking away and not having the bank collect.' Lenders wrote off as uncollectible $11.1 billion in home equity loans and $19.9 billion in home equity lines of credit in 2009, more than they wrote off on primary mortgages, government data shows. So far this year, the trend is the same, with combined write-offs of $7.88 billion in the first quarter."
The Fed faces yet more difficult decisions after its easing move: http://nyti.ms/bTdvZk
The SEC's FOIA exemption is drawing criticism, reports Daniel Strauss: "There are now a number of bills to amend it, one backed by Rep. Darrell Issa (R-Calif.) and another spearheaded by Sens. Patrick Leahy (D-Vt.), John Cornyn (R-Texas), Ted Kaufman (D-Del.) and Chuck Grassley (R-Iowa)...'The Dodd-Frank Act mandates a number of new responsibilities for the SEC to protect investors, including new authority over hedge funds, private equity funds and venture capital funds,' [SEC Chairwoman Mary Schapiro] wrote. '...In order for our efforts to be successful, it is important that registered entities be able to provide us with access to confidential information without concern that the information will later be made public.'"
John Carney questions Fannie and Freddie's exemption from Dodd-Frank's risk-retention rules: http://nyti.ms/aLKGcD
Matt Miller wishes the state aid bill had tough requirements for state budgets: "The auto emergency offers the right template -- because the industry was forced to restructure as a condition of its bailout. The states haven't been. Borrowing from China to skirt devastating state layoffs is one thing. But borrowing from China to keep runaway Medicaid programs in New York and California free from fundamental overhaul, and gargantuan unfunded public pensions untouched, seems mad. In California, more money is spent each year on compensation and pensions for 70,000 prison employees than on the state's entire higher education system!"
William Poole makes the case for the outright abolition of Fannie and Freddie: http://nyti.ms/b1iVDe
Movie/comic mashup interlude: The Scott Pilgrim Vs. The World trailer redone with the original comic panels.
Some green jobs are facing outsourcing, reports Joseph White: "Michigan solar cell maker Energy Conversion Devices, Inc... will move final assembly of some of its existing solar cell products out of an Auburn Hills, Mich. plant to Tijuana, Mexico. The decision means 140 of ECD’s Michigan workers will be out of a job this fall, the company says. About 750 ECD jobs will remain in Michigan, it says. ECD’s decision to shift what it described as low-skill assembly jobs to Mexico is part of a broader effort to cut costs and compete with solar cell makers which have manufacturing operations in China, Malaysia and other lower-wage nations, says Martha Duggan, ECD’s head of government and regulatory affairs."
Energy efficient light bulbs are falling in price faster than expected: http://bit.ly/bkZLi1
Supporters of green energy are balking at the funding behind the state aid package, reports Stephen Power: "To help pay for the aid bill, lawmakers cut $1.5 billion from the Department of Energy’s renewable energy loan guarantee program. It’s the second time in roughly a year that Congress has raided the program to fund other priorities. Last summer, lawmakers cut $2 billion from the DOE’s renewable energy loan account to extend the highly popular Cash for Clunkers program. Congress has not repaid the agency that $2 billion, despite frequent promises by its leaders to do so."
Germany is considering a tax on coal: http://bit.ly/aJ1x4C
Investors are concerned about the effect of repealing California's climate bill on tech firms, reports Todd Woody: "'Proposition 23 will kill markets and the single largest source of job growth in California in the last two years,' declared Vinod Khosla, a leading green tech investor, referring to the clean energy economy. 'Not only that, it'll kill investment in the long term for creating the next 10 Googles.' Chipped in Weihl: 'For California, we can either lead in this and invest in it and participate in this huge growth sector or cede that to China, India, and other places. It would be crazy for us to sit back and let others take that opportunity.'"
Dave Roberts details how coal regulators at the EPA are making up for lost time: "To understand what's going on at EPA, you have to keep in mind what's happened for the last eight years -- namely, nothing. Bush came into office in 2000 and immediately dismissed the lawsuits the Clinton administration had filed against a raft of old power plants. For the next eight years, coal utilities were effectively allowed to regulate themselves; industry representatives staffed and administered EPA air programs. Relentless effort was made to weaken the law and enforcement was utterly gutted...what Lisa Jackson's EPA is doing as we speak: updating a whole panoply of Clean Air Act and other pollution standards. That's what has coal utilities terrified."
Bradford Plumer sings the praises of biochar as an emissions reduction method: http://bit.ly/dclDPa
Adorable animals overcoming adversity interlude: The world's cutest legless cat.
One in twelve American children have undocumented immigrants as parents, reports Miriam Jordan: "The report, based on Pew's analysis of the Census Bureau's March 2009 Current Population Survey, also found that the lion's share, or 79%, of the 5.1 million children of illegal immigrants residing in the U.S. in 2009 were born in the country and are therefore citizens...Under U.S. law, children have to wait until they reach the age of 21 before they can petition for permanent legal residency for their parents...Mr. Passel said that the Pew analysis found that more than 80% of the undocumented immigrant mothers who gave birth in the U.S. had been in the country at least a year, and that many had been here about a decade."
Research suggests policymakers aren't doing enough to prevent people from falling into poverty:, as opposed to helping them out of it: http://bit.ly/aqXBSe
States are experimenting with decentralized learning, writes David Graham: "A smaller but growing number of states, from Florida to New Jersey to Kentucky, have begun allowing students to earn credit through internships, independent studies, and the like. It’s a logical extension of the realization that simply being in a seat from bell to bell doesn’t guarantee intellectual development. Students--and their parents--are at least theoretically attracted to the idea of studying what they want, at the pace they want."
The Senate is reconvening to pass border funding to tomorrow: http://politi.co/dDljAo
Debbie Wasserman Schulz and Rosa DeLauro tout preventive care measures in health care reform: "Preventive care is fiscally responsible. Paying for regular mammograms is a lot cheaper and a lot more beneficial, in terms of money and quality of life, than paying for and undergoing surgery, radiation, chemotherapy or hormonal therapy. In short, preventive care goes a long way toward reducing surging health care costs for American families. Even Republicans who voted against the health care reform law and went out of their way to prevent its passage have now lauded these reforms. Recently, on the Senate floor, Sen. Jon Kyl (R-Ariz.) actually took credit for the preventive care provision."
Constitutional scholar Walter Dellinger explains the historical background of birthright citizenship: http://politi.co/9m9f4j
Ray Fisman thinks improving schools may require firing most new teachers: "The researchers went through a simulation exercise, building on prior findings about the impact that great teachers have on their students, the fraction of incoming teachers who turn out to be strong performers in the classroom, and the "signal-to-noise" ratio in a teacher's performance during her first couple of years (i.e., how hard it is to tell whether a teacher is bad or just unlucky). When they ran the numbers, the answer their computer spat out had them reviewing their work looking for programming errors. The optimal rate of firing produced by the simulation simply seemed too high: Maximizing teacher performance required that 80 percent of new teachers be fired after two years' probation."
Closing credits: Wonkbook compiled with the help of Dylan Matthews and Mike Shepard.
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