The Ticker Quick Views on Politics, Economics and Finance
Levy Izhak Rosenbaum of Brooklyn has been sentenced to two and a half years in prison for illegally brokering sales of kidneys. He will also forfeit $420,000 in profit. It’s the first case ever brought under the 1984 act outlawing the exchange of “valuable consideration” for organs.
Rosenbaum, who was caught in a sting as part of a broader corruption probe, may be the generous life-saver his supporters maintain. He may be the venial money-grubber portrayed by prosecutors. Or, like the donors who took money for their kidneys, he may be something in between.READ MORE
Campaigning was fun -- up to a point, wrote Geraldine Ferraro, the 1984 Democratic nominee for vice president: “Every time I faced the press, however, I was besieged with questions about our finances. It was brutal.”
If Mitt Romney is feeling misunderstood and put upon, he might want to pick up Ferraro's memoir and read about the frenzy over her financial disclosure forms and her husband's tax returns. Then again, he might not.READ MORE
Two months ago, after Jamie Dimon held an emergency teleconference to fess up about a big problem with traders at the chief investment office of JPMorgan Chase & Co. (JPM), he acknowledged that he had been "dead wrong" to have referred to press reports in April about the bank's London Whale fiasco as a "tempest in a teapot."
Here's another thing he was dead wrong about. The same day as that conference call, May 10, Dimon, JPMorgan's CEO, certified in the company's first-quarter report with regulators that JPMorgan's internal controls were effective as of March 31. JPMorgan's chief financial officer, Douglas Braunstein, certified the same. Both said they had disclosed "any change" that occurred during the first quarter "that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting." They also said the company's disclosure controls and procedures -- a related category of internal controls -- were effective.READ MORE
Yesterday’s release of the Freeh Report, assigning responsibility for Penn State’s failure to act on reports that Jerry Sandusky was sexually abusing boys, has people talking about whether the NCAA should shutter Penn State’s football program. That would be setting our sights too low. For the good of both universities and athletes, we should end the NCAA cartel and get high-level football and basketball off all college campuses, not just Penn State.
What the NCAA does is fundamentally abusive: it holds the wage for minor league football and basketball players down to zero, under the pretense that its workers are students. The person who put this best was Robert Barro (my father), writing for Bloomberg Businessweek in 2002 that the NCAA is America’s most effective monopoly:READ MORE
The rumor-du-jour is that Mitt Romney is looking at picking Condoleeza Rice as his running mate for the presidency. It’s been widely pooh-poohed as a too- convenient distraction to get the press to stop talking about whether Romney was forthcoming about when he left Bain, and how many years of tax returns he’ll release. The pundits say it’s too big a problem that Condi is pro choice, that she’s not an attack dog, that she doesn’t even want to be vice president (though on the last point, is anyone who says that ever telling the truth?).
But this won’t be the first time Romney has picked a running mate. And if you look at the decision he made when he ran for governor of Massachusetts in 2002, a Condi selection looks very much in character.READ MORE
When I wrote last month about the Census Bureau's horrible website, I got a lot of messages from other reporters and policy researchers agreeing that Census.gov makes them want to tear their hair out.
But it gets worse! Today, I learned that the new version of American FactFinder -- just one borderline-unusable section of the much larger universe of brain-melting user experiences that is Census.gov -- was developed by IBM at a cost to taxpayers of $33.3 million. Census has a website that isn't just terrible, it's also extremely expensive.READ MORE
For the last few days, we've been fighting over how involved Mitt Romney was in Bain Capital's business from 1999 to 2002. There have been some specific critiques of Bain's actions during this time -- that they were heavily involved in outsourcing jobs -- and Romney's response has been to insist that he left Bain in 1999 and had nothing to do with the company's subsequent actions.
But really, what Mitt Romney was doing in 2000 is beside the point. Romney founded one of America's leading private equity firms. What private equity does is take underperforming firms and make them more profitable, sometimes by closing facilities and sending operations overseas. If he can't defend Bain's 1999-2002 record on the merits, he can't defend its record from 1984 to 1999 either.READ MORE
Mitt Romney gave a speech to the NAACP in Houston yesterday, producing a vivid array of polarized reactions.
In the Washington Post, Michael Moynihan congratulated Romney "for entering the lion’s den, getting briefly hooted down by a hostile crowd, and keeping your composure." In Moynihan's telling, the candidate's speech before a crowd of confirmed Obama partisans was an act of personal courage. Well, personal courage bolstered by a bit of political calculation:READ MORE
The U.S. House of Representatives voted today to repeal the Affordable Care Act (aka Obamacare), which was upheld as constitutional by the Supreme Court last month. It was the 33rd time Republicans acted to "defund, dismantle or repeal" the law, according to ABC News. The vote was 244-185.
The public doesn't need another symbolic display of Republican animus for President Barack Obama's signature legislative achievement. We got the message, at least by the 18th vote. Beyond that, it looks silly, especially since the Senate doesn't plan to take up the measure.READ MORE
Last month it was Stockton, and now San Bernardino, California is preparing to file for bankruptcy. Like Stockton, San Bernardino is a large, working-class city on the fringe of a prosperous, coastal metropolitan area. And like Stockton, it was especially vulnerable to the structural problems in California that can push cities into bankruptcy.
Sometimes, municipalities end up in bankruptcy for idiosyncratic reasons: Orange County made bizarre investments in derivatives that turned bad; Mammoth Lakes lost a devastating court case for breach of contract. Usually, however, a city goes bankrupt because two things happen together: It makes policy mistakes, and then it gets hit with unexpectedly bad economic conditions.READ MORE
So Gen. Stanley McChrystal, and now Thomas Ricks, want to bring back the draft. Writing yesterday in the New York Times, Ricks proposes a mandatory 18 months of national service following high school. Conscripts would enter the military, but wouldn’t be deployed unless they volunteered to be. Instead, they would do things like “paperwork, painting barracks, mowing lawns, driving generals around, and generally doing lower-skills tasks so professional soldiers don’t have to.”
Or, young people could choose to do civilian service, but they would have to do 24 months of that. The conscripts wouldn't be paid much, but they would get free college tuition afterward.READ MORE
A fair amount of journalistic inquiry over the past year has focused on what Mitt Romney truly believes in his heart. The Republican candidate's prepared remarks to the NAACP today rekindled the topic:
"I believe that if you understood who I truly am in my heart," Romney said, "and if it were possible to fully communicate what I believe is in the real, enduring best interest of African American families, you would vote for me for president."READ MORE
President Barack Obama's call yesterday for Congress to extend most of the Bush tax cuts was widely received as non-news. The president was reiterating a position he has long held, and one that he returns to when he thinks it is politically advantageous -- just as House Republicans do when they vote, over and over, to repeal Obamacare.
But there was an important shift in the president's call for tax relief. Historically, he has said that the "middle class" portion of the Bush tax cuts (about 80 percent of the total) should be made "permanent." That was his position during the 2008 campaign and during his fight with Republicans over the extension of the taxes in 2010.READ MORE
Maine Governor Paul LePage raised hackles last weekend for calling the IRS "the new Gestapo." The tax agency earned this comparison to the Nazi secret police, apparently, because it will be charged with penalizing those who do not buy health insurance under Obamacare.
Yet the most remarkable aspect of LePage's remarks wasn't the Nazi comparison. It was what he didn't say: Instead of joining Republican governors of six other states in announcing he will refuse to participate in the expansion of Medicaid, he wants to wait and see how the numbers add up.READ MORE
In 2011, 35,000 taxpayers making more than $200,000 a year paid no federal income tax. As Matthew O’Brien notes at The Atlantic, 61 percent of those avoided tax for the same reason: their income consisted largely of interest on tax-exempt municipal bonds.
As Washington looks for options to broaden the tax base, and particularly to eliminate tax preferences for the wealthy, why not eliminate this exemption?READ MORE
Representative Thaddeus McCotter, Republican of Michigan, resigned Friday, on the grounds that he was basically sick of the job. If he is remembered at all, it will probably be for his comically unsuccessful run for the Republican presidential nomination this year. (Did you not even notice he was running? Exactly.)
I prefer, however, to remember McCotter for advancing one of the worst tax policy ideas of recent times: an income-tax deduction for pet-care expenses.READ MORE
How's this for prescient?
Check out the first couple of paragraphs of a Bloomberg News article from May 29, 2008, under the headline, "Libor Banks Misstated Rates, Bond at Barclays Says." (Yes, the article ran more than four years before Barclays's $453 million settlement last month with U.S. and U.K. authorities for manipulating Libor.) The story begins:READ MORE
For Roger Federer to clinch his spot in the Wimbledon finals, it took a victory over the top-ranked defending champion, Novak Djokovic. For certain spectators desperate to guarantee a spot in the stands, it required buying into one of the weirdest bond markets in the world.
The All-England Lawn Tennis Club, which hosts the tournament, sells debentures that entitle holders to tickets to the Wimbledon tennis championships. The club offers 2,500 Centre Court bonds, covering tournaments from 2011 to 2015, and 1,000 Number One Court coupons, covering those from 2012 to 2016. Centre Court debentures were recently traded in London for 66,000 pounds ($103,000), more than twice the price of two years ago, when they were first issued, Smart Money reports.READ MORE
The New York Times' Ross Douthat has responded to my post on Republicans and health care. He agrees that many Republican elected officials have little interest in implementing an alternative health care reform -- that they are far more likely to repeal Obamacare than to replace it.
But he notes that many conservative policy thinkers are serious about alternative reforms, and asks what option they have but to advocate their plans to a reluctant Republican Party, in hopes that eventually, they will listen:READ MORE