Tag Archives: Economics reporting
by Liz Hester
After a snowstorm pushed back her appearance before the Senate Banking Committee, Federal Reserve Board Chair Janet Yellen answered a variety of questions Thursday about topics ranging from asset purchases to Bitcoin.
Bloomberg’s Craig Torres led with the tapering of asset purchases:
Federal Reserve Chair Janet Yellen said the central bank is likely to keep trimming asset purchases, even as policy makers monitor data to determine if recent weakness in the economy is temporary.
“Unseasonably cold weather has played some role,” she said in response to a question today from the Senate Banking Committee. “What we need to do, and will be doing in the weeks ahead, is to try to get a firmer handle on exactly how much of that set of soft data can be explained by weather and what portion, if any, is due to softer outlook.”
Yellen repeated the Fed’s statements that the central bank intends to reduce asset purchases at a measured pace, and she said in response to a separate question that the bond-buying program was likely to end in the fall.
At the same time, “if there’s a significant change in the outlook, certainly we would be open to reconsidering, but I wouldn’t want to jump to conclusions here.”
Yellen’s testimony to the Senate panel, originally scheduled for Feb. 13, was postponed because of a snowstorm, creating an unusual two-week gap between her appearances before the two committees that oversee the central bank. Since her House testimony, weaker-than-forecast data on retailing, manufacturing and home construction have suggested the economy is slowing, in part because of harsh winter weather.
The New York Times story by Binyamin Appelbaum added some details about the data Yellen was reviewing to make her decision:
Ms. Yellen cited the slow pace of job growth in December and January, weakness in the housing market and disappointing retail sales and industrial production.
The remarks were a shift from Ms. Yellen’s testimony two weeks ago before the House Financial Services Committee. But Ms. Yellen did not change her description of the Fed’s plans, saying that the central bank was still quite likely to keep cutting back on its monthly purchases of Treasuries and mortgage-backed securities.
Senator Charles E. Schumer, Democrat of New York, asked Ms. Yellen whether the Fed would reconsider if it concluded that the cold was not the whole problem.
“Certainly we would be open to reconsidering it,” Ms. Yellen responded, “but I wouldn’t want to jump to conclusions.”
The Associated Press story (via the San Jose Mercury News) by Martin Crutsinger pointed out that Yellen is following in Bernanke’s footsteps:
In both her House and Senate appearances, Yellen sought to emphasize policy continuity with her predecessor, Ben Bernanke, who stepped down last month after eight years leading the central bank.
Yellen said that she, like Bernanke, believed the economy is strengthening enough that the Fed can gradually pull back its monthly bond purchases.
The Fed has cut the pace of bond purchases at both its most recent meetings. It reduced the original $85 billion monthly pace in December and again in January in $10 billion steps to a current level of $65 billion.
Many economists think that as long as the economy keeps improving, the Fed will keep cutting the bond purchases by $10 billion at each meeting this year until ending the program in December.
The Fed has stressed that it’s standing by a plan to keep a key short-term rate at a record low near zero for an extended period. At the past two meetings, it has said short-term rates will remain low “well past” the time unemployment drops below 6.5 percent. The unemployment rate is now 6.6 percent.
Many economists think the first rate hike won’t occur until late 2015. But minutes of the Fed’s last meeting showed that “a few” policymakers felt it might be appropriate to make the first move to raise short-term rates “relatively soon.”
The Fed has held its benchmark for short-term rates near zero since December 2008.
Reuters had a short piece citing Yellen’s remarks that Congress should look into regulating bitcoin:
The U.S. Congress should look into legal options for regulating virtual currencies such as bitcoin, Federal Reserve Chair Janet Yellen said on Thursday.
Japan-based bitcoin exchange Mt. Gox went dark on Tuesday, leaving customers unable to access their accounts. Experts have warned they might not have much recourse to recover their money.
Yellen said the Fed had no jurisdiction over bitcoins, which are created using a network of computers that solve complex mathematical problems and are not traded or held by banks.
Bitcoin aside, the Federal Reserve is holding its policy the same for now, something the market expected. It will be interesting to watch the next round of numbers. If economic data continues to weaken, Yellen may be forced to revisit her current policy. But for now, no change is good.
by Chris Roush
Bloomberg News is looking for an energetic reporter to cover the Federal Reserve Bank of New York, the central bank’s eyes and ears on Wall Street.
The person in this role must be able to develop sources and break news, while also identifying emerging trends to write big-picture stories on monetary and regulatory policy. Teamwork is essential, since this individual will be working closely with some of the sharpest Fed reporters in the business.
Minimum of three years of real-time business reporting experience are a must. Experience in central banking, finance or financial markets preferred.
-Bachelor’s degree or equivalent experience
-Knowledge of the economy, financial markets and business
-Minimum of three years of experience in business journalism
-Ability to write quickly and concisely under pressure
To apply, go here.
by Chris Roush
Bloomberg News is seeking an experienced editor in Washington D.C. to help shape its coverage of the U.S. economy.
The editor will work with some of the best economic writers in the business on enterprise stories that identify emerging trends and explain their relevance to financial markets. We are looking for candidates who thrive on robust newsroom debate, have a strong grasp of economics and policy and can help tell a story in compelling terms for a sophisticated audience.
Candidates should be accustomed to producing clear and comprehensive enterprise pieces, have a record of breaking important stories, and be able to edit spot news under real-time deadline pressure.
-Bachelor’s degree or equivalent experience
-Minimum of three years of business journalism experience
-Prior experience editing stories
-Ability to write quickly and concisely under deadline pressure
To apply, go here.
by Chris Roush
Reuters is seeking a journalist who is a proven news breaker and deeply sourced professional to cover the U.S. Federal Reserve from Washington.
We need someone with a hefty record in delivering ahead-of-the-curve initiative reporting and agenda-setting stories, who is comfortable handling breaking news, and whose prose stands out for its clarity.
The Fed is one of Washington’s most cloistered institutions, so the winning candidate will need excellent source-building skills. Moreover, this reporter must be capable of generating smart and incisive copy that takes readers beyond the bank’s clutch of annual public events to paint the big picture about the future policy track for the world’s most important central bank.
The Fed is at a critical juncture. It about to welcome a new chair and vice chair just as the Fed is preparing to wind down the greatest monetary policy experiment of all time. A mountain of unanswered questions on the direction of U.S. monetary policy, the U.S. and global economies and world financial markets will emerge in the wake of this high-stakes act.
We need someone who is able to come to terms with the beat quickly and who can help drive the file on what is one of the most important stories for our diverse readership. We also need a team player who can work hand in glove with the rest of our Fed coverage team. The reporter who wins this post needs to have a grounding in both economics and finance and a strong sense for how Fed policy interacts with financial markets. Even more so, however, this person needs a hard nose for news and the skills required to tell a big story well.
To apply, go here.
by Liz Hester
British authorities filed charges against three more people in the ever-widening Libor manipulation case. Manipulating the benchmark rate has been a global scandal involving several firms since July 2012.
David Enrich and Margot Patrick wrote in the Wall Street Journal about the expanding nature of the probe:
British prosecutors filed criminal charges against three former bank traders for alleged fraud, opening a new front in a global investigation into alleged rigging of benchmark interest rates, with more charges in the pipeline.
The U.K.’s Serious Fraud Office said Monday that it charged three former Barclays PLC traders with conspiracy to defraud for their alleged roles rigging the London interbank offered rate, or Libor. The agency, which opened its criminal investigation in July 2012, also is likely to file charges against three former ICAP PLC brokers for allegedly helping bank traders manipulate rates, according to people familiar with the case
The U.K.’s latest charges represent a broadening of the Libor investigation, which got under way in 2008. They serve as a reminder of the scandal’s scope and the pervasive nature of the alleged misconduct, even as the Libor investigation begins to be overshadowed by nascent criminal and civil examinations into potential manipulation of other financial benchmarks.
Monday’s charges bring to 13 the number of people criminally charged in the U.S. or U.K. investigations into Libor, a benchmark used to set interest rates on trillions of dollars of loans and other financial contracts.
Chad Bray named the three men in the second paragraph of his story for the New York Times:
The Serious Fraud Office said that Peter C. Johnson and Jonathan J. Mathew, both former rate submitters at Barclays, and Stylianos Contogoulas, a former trader, would face charges of conspiring to manipulate the London interbank offered rate, or Libor. The three are to appear in Westminster Magistrates’ Court, possibly this month.
Some of the world’s largest banks, including Barclays, Royal Bank of Scotland and UBS, have been caught up in the scandal and have agreed to pay billions of dollars to settle allegations with regulators in Britain, the United States and elsewhere.
Three people already faced criminal charges in Britain. Last December, Tom Hayes, a former derivatives trader at UBS and Citigroup, and Terry J. Farr and James A. Gilmour, former traders at the brokerage firm RP Martin, pleaded not guilty in London.
The trial of Mr. Hayes, the first person to be charged criminally in Britain in the scandal last year, is expected to begin next year. He also faces criminal charges in the United States.
British prosecutors have said they have identified 22 people as potential co-conspirators. On Monday, the antifraud office said its investigation was continuing and it was collaborating with Britain’s Financial Conduct Authority and the United States Department of Justice, which are conducting investigations.
The Financial Times story by Caroline Binham added some background on the U.S. side of the investigation:
The US Department of Justice has also taken an interest in at least one of the individuals. The Financial Times previously reported that Mr Mathew had signed a non-prosecution agreement with DoJ in 2012 before Barclays paid £290m to settle allegations that it attempted to manipulate Libor.
The DoJ was made aware of the SFO’s intention to charge the three Barclays defendants, according to people familiar with the situation. The DoJ’s own investigation into Barclays’ individuals and the rigging of dollar-denominated Libor is continuing, those people said.
Barclays declined to comment, as did lawyers for Mr Mathew. A lawyer for Mr Contogoulas said that his client intended to fight the charges. Lawyers for Mr Johnson could not immediately be reached.
The SFO has previously charged three men as part of its parallel probe into the rigging of yen Libor. Tom Hayes, a former UBS and Citigroup trader, denies the charges and is due to face a jury in January 2015, while two RP Martin brokers are scheduled to stand trial later in 2015.
Bloomberg’s Lindsay Fortado added this background about the fines and charges that have been levied so far:
The U.S. has charged eight people, including Hayes. Former Rabobank traders, another former UBS trader, and three former ICAP brokers have also been accused by the Justice Department. None are in U.S. custody.
Firms including Barclays and UBS have been fined a total of about $6 billion for manipulating benchmark interest rates. The U.S. and U.K. are running parallel criminal probes.
The SFO sought an extra 19 million pounds from the British government last month to pay for “blockbuster” cases including the probe into benchmark manipulation. Its 2013-2014 budget has plunged to 32 million pounds from 52 million pounds in 2008. The prosecutor previously received 3.5 million pounds in 2012 to help fund its Libor probe.
David Green, the SFO’s director, said last year the agency had doubled the number of people working on the investigation to 60 and that they were focusing on British nationals at British banks.
This story is one that has repercussions for nearly everyone involved in the global financial markets. It’s resulted in fundamental changes to the way the rate is set and also ousted Robert Diamond, former head of Barclays. As regulators begin unraveling this mess, there will be more charged. It will be interesting to see how far up it goes.
by Chris Roush
David Leonhardt, the Pulitzer Prize-winning economics reporter for the New York Times leading a new venture for the paper, sent out the following staff announcements for that operation:
Late last year, Jill announced that we would be creating a new politics-and-policy website with a focus on data, and I want to update everyone on our progress. Our goal is to use a conversational style to demystify politics, economics, health care and other issues. We will publish a steady stream of pieces on a website within nytimes.com, some of which will run in the paper, and also create many graphics and interactive tools. As a model, think of the multimedia package that ran last summer on upward mobility or the 2010 deficit puzzle.I’m thrilled to announce a stellar new group of journalists and contributors who have joined the team:
Laura Chang and Damon Darlin join us as the two editors who will help to run the venture. They are a dream team for this work. Laura spent seven years running our world-beating Science desk and has most recently run the Booming blog. She’s known as an intensely smart and calming editor with a particular talent for melding words and graphics. A Seattle native and graduate of (as they say there) U-Dub, Laura joins Nate Cohn in our group’s ex-pat Pacific Northwesterner caucus.
Damon, now the international business editor, comes to us originally from the Midwest — Dubuque, Iowa — by way of journalistic stints in Asia, Washington and across the U.S. At The Times, he has written an engaging personal-finance column, played a pivotal role in the launch of The International New York Times and, as technology editor, helped make the Bits blog such a success. Damon is the classic early adopter (check out his robot vacuum cleaner) who brings the mix of rigor and imagination that we want. He’ll start work in New York before moving to Washington later this year.
Josh Katz becomes the second trained statistician to join the group (along with Amanda Cox). Josh joined the graphics department as an intern last summer, after graduate school at N.C. State, and reeled off an impressive series of graphics on many subjects. Oh, yes: he’s also responsible for the most visited page in the history of The New York Times website, the famed dialect quiz. Josh conceived of the project and developed its algorithm. He’s from South Jersey, enjoys the occasional hoagie and has yet to visit a brew-thru.
Kevin Quealy has spent much of his six years at The Times making me and other colleagues look more talented than we are. He is the creative force behind some of our most successful interactive projects, including the still-popular rent-vs-buy calculator, the deficit puzzle, the 100-meter dash video and the NYT 4th Down Bot. A graduate of Gustavus Adolphus College (physics), the Peace Corps (South Africa) and the University of Missouri (journalism), Kevin will be the first to tell you that all of his projects here have been collaborative efforts, and they were. But don’t let his Minnesota humility fool you: He’s one of the sharpest journalists I’ve ever met.
Derek Willis is the intellectual father of The Times’ Interactive News department. So says Aron Pilholfer, who runs that department. Derek’s groundbreaking work at The Washington Post helped persuade The Times to create an Interactive department — and Derek has since helped Aron build that department into the industry’s best. A former CQ writer with a reporter’s instinct and a developer’s mind, Derek has been central to The Times’s breathtaking election-night coverage, the success of 538 when it was here and many other things. “I couldn’t do my job without him,” says Nick Confessore. Perhaps Derek’s greatest accomplishment, though, came in college, when his column in the University of Florida student newspaper led coach Steve Spurrier to call him “a punk and a jerk.” If you know Derek, you see the humor in this.
Our most recent addition is Darcy Eveleigh, whom many people around the paper know as a highly creative photo editor. Five years ago, she took a trip to the Times Photo Archive and, as she says, “soon found myself spending every spare moment lost in the picture collection.” Her adventures there led to the “Lively Morgue,” which has grown into a Tumblr with 88,000 followers. Born in Brooklyn, raised in Staten Island, now living with her family in Manhattan, she will work with Michael Beschloss and guide our site’s photography. As I’ve said before, history — what the past tells us about the present and future — will play a central role in our work, making Darcy an excellent member of our team.
We’re also adding three more contributors:
Brendan Nyhan has established a reputation as one of the most thought-provoking writers about politics on the web. Bloomberg View says he’s part of “a new breed of conscientious political science bloggers… subtly tailoring the discourse, creating reputational hazards to seat-of-the-pants punditry.” Brendan is a political scientist at Dartmouth and has most recently been writing for the Columbia Journalism Review.
Lynn Vavreck, a U.C.L.A. political scientist, is already well known to politics aficionados. She has written several smart pieces for The Times and is the author, with John Sides, of “The Gamble,” a book about the 2012 campaign. Listen to the raves: Ryan Lizza called the book “mandatory reading.” Nate Silver called it “the definitive account” of the campaign. Ezra Klein said the book “should change how we cover campaigns.”
Finally, Sendhil Mullainathan joins us to write about economics, poverty and other topics and to help us design online interactives. A MacArthur “genius grant” winner and Harvard professor, Sendhil is one of the world’s leading behavioral economists. He’s the author, with Eldar Shafir, of the recent book “Scarcity.” To listen to Sendhil talk is to understand how economics can be both important and fun.
We’ll have more to say about the project soon.
by Liz Hester
This week’s edition of Bloomberg Businessweek rolled out with six different covers each featuring a low-paid worker in a story about raising the minimum wage.
Peter Coy wrote the story:
Raising the minimum wage is certain to be a wedge issue for Democrats in the midterm elections because it’s the rare redistributive measure that enjoys broad popular support. A Washington Post-ABC News poll in December found that two-thirds of Americans support a minimum wage increase. But to opponents, it smacks of Big Government heavy-handedness. That explains why politicians on both sides are loudly reminding their constituents of their ideologies. The back and forth, however, fails to address the real issues: What’s the right minimum wage? And what’s the fairest way for the world’s largest economy—historically a beacon of social mobility—to arrive at it?
The first question is a bit easier to answer. The original minimum wage, 25¢ an hour, was born in 1938 under similar conditions of economic hardship and class resentment. Labor Secretary Frances Perkins and President Franklin Roosevelt had fought for it for five years. The night before signing the Fair Labor Standards Act, in a radio fireside chat, Roosevelt said, “Do not let any calamity-howling executive with an income of $1,000 a day … tell you … that a wage of $11 a week is going to have a disastrous effect on all American industry.”
Coy goes on to talk about the argument against government setting pricing standards and why some free-market advocates dislike the interference. He then examines research debunking the notion that raising wages contributes to higher unemployment.
The Card-Krueger study touched off an econometric arms race as labor economists on opposite sides of the argument topped one another with increasingly sophisticated analyses. The net result has been to soften the economics profession’s traditional skepticism about minimum wages. If there are negative effects on total employment, the most recent studies show, they appear to be small. Higher wages reduce turnover by increasing job satisfaction, so at any given moment there are fewer unfilled openings. Within reasonable ranges of a minimum wage, the churn-reducing effect seems to offset whatever staff reductions occur because of higher labor costs. Also, some businesses manage to pass along the costs to customers without harming sales.
Writing for the Huffington Post, Jillian Berman’s headline said the story makes “a terrific argument for raising the minimum wage”:
The magazine made six covers featuring low-wage workers. Each person is seen holding up an answer to one of the following questions: “What is your biggest financial fear?” “What do you think you should earn?” and “What do you do?”
“I’m a cashier. I make people smile,” one sign reads. “I worry that the more time I spend working, the less time I have raising my children,” another one states.
The story accompanying the cover delves into how different stake-holders make the economic case for raising the minimum wage or keeping it the same (the federal minimum wage is a measly $7.25). Democratic lawmakers have proposed raising the minimum wage to $10.10 an hour (with President Obama’s backing), but the provision is stalled in Congress.
The affects of a minimum wage increase on the economy is one of the most hotly debated issues in economic research. Conservatives argue that a boost in the minimum wage would actually be worse for workers because it would make businesses more hesitant to hire. Six hundred economists, including seven nobel laureates, signed a letter last month backing a $10.10 minimum wage. The letter states that the “weight of evidence” shows that “increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market.”
The timing of the story coincides with President Obama signing an executive order to raise the rate, Elena Schneider reported in the New York Times:
President Obama signed an executive order on Wednesday to raise the minimum wage to $10.10 an hour from $7.25 an hour for federal contract workers starting in 2015, a promise he made in his State of the Union address last month.
“We are a nation that believes in rewarding honest work with honest wages,” Mr. Obama said Wednesday in a letter announcing the move. “And America deserves a raise.”
As Coy points out, the debate is one of economics, and also politics and elections. There are many sides and special interests that get factored into the discussion and decisions, but people need to make more money to survive. And that’s what the president is saying by issuing his executive order. The Bloomberg Businessweek piece is a comprehensive look at the politics and debate over the minimum wage and worth the read.
by Liz Hester
In one of the sanest moves in recent Congressional history, the U.S. House passed a bill to raise the nation’s borrowing limit without any stipulations attached. It’s big news considering the recent history of Congress holding the limit and investors hostage as it debates whether to pay bills its already incurred.
The Washington Post had this story by Paul Kane, Robert Costa and Ed O’Keefe:
The House passed a yearlong suspension of the Treasury’s debt limit Tuesday in a vote that left Republicans once again ceding control to Democrats, following a collapse in support for an earlier proposal advanced by GOP leaders.
In a narrow vote, 221-201, 28 Republicans voted with 193 Democrats to approve a “clean” extension of the federal government’s borrowing authority — one without strings attached — sending the legislation to the Senate for a possible final vote later this week. Two Democrats and 199 Republicans voted no.
The vote came two weeks before the Feb. 27 debt-limit deadline set by Treasury Secretary Jack Lew, and once again underscored the House leadership’s inability to corral Republicans behind a debt-ceiling plan. “The natural reluctance is obvious,” said Rep. Peter Roskam (R-Ill.), the chief deputy whip.
Conservative advocacy groups reacted negatively to Boehner’s plan to bring the clean bill to a vote, with spokesmen for Heritage Action for America and the Club for Growth urging members to vote “no” and including the vote on their scorecards, which serve as guides for their supporters. “When we heard that House leadership was scheduling a clean debt-ceiling increase, we thought it was a joke,” said Barney Keller, a Club for Growth adviser. “But it’s not. Something is very wrong with House leadership, or with the Republican Party.”
The New York Times story by Ashley Parker and Jonathan Weisman pointed out that the move signaled more dissent within the Republican ranks:
Mr. Boehner stunned House Republicans Tuesday morning when he ditched a package that would have tied the debt ceiling increase to a repeal of cuts to military retirement pensions that had been approved in December and announced he would put a “clean” debt ceiling increase up for a vote.
Enough Republicans had balked at that package when it was presented Monday night to convince the speaker he had no choice but to turn to the Democratic minority. It was another startling display of Republican disunity, fueled by the political ambitions of members seeking higher office and personal animus that burst into the open.
For Mr. Boehner it was a potentially momentous decision. Anger among the nation’s most ardent conservatives at the House leadership may be at an apogee. The Tea Party Patriots, FreedomWorks, and conservative activists on the website RedState.com are all circulating petitions to end Mr. Boehner’s speakership.
And it was Mr. Boehner who raised such high expectations around the debt limit. In 2011, he established what has become known as the “Boehner Rule”: any debt ceiling increase was supposed to be offset by an equivalent spending cut.
Kristina Peterson and Janet Hook wrote in the Wall Street Journal that Democrats celebrated the move:
Democrats welcomed the news that Republicans had withdrawn their policy demands on the debt ceiling as an example of how their party’s coordinated stance has lent them leverage over a divided GOP caucus.
“Democratic unity around responsible government and honoring our national debt has helped force the Republicans to be responsible on this issue,” said Rep. Jared Polis (D., Colo.).
Democrats propelled the bill through the chamber, with 193 Democrats and 28 Republicans voting for the debt-ceiling suspension. The measure was opposed by two Democrats and 199 Republicans.
Susan Davis had this background about the debt ceiling debate in USA Today:
However, after the partial government shutdown last October — which left the GOP politically bruised— Boehner and other GOP leaders pledged that Congress would not allow a debt default. Without any internal GOP consensus on how to proceed on the latest debt ceiling increase, Boehner had few options but to allow an up-or-down vote.
During Boehner’s tenure as speaker, congressional Republicans have waged battles over the debt limit under an informal rule advocated by the Ohio Republican that any increase in the debt limit should be met by equal or greater spending cuts or other savings. Tuesday’s vote abandoned that standard. “I am disappointed to say the least,” Boehner said.
Outside conservative and Tea Party groups — long at odds with the party establishment — ratcheted up their rhetoric opposing Boehner. The Senate Conservatives Fund circulated an online petition calling for Boehner to be replaced, while Tea Party Patriots co-founder Jenny Beth Martin said, “It is time for him to go.” Neither Boehner nor his office has responded to the opposition groups.
The speaker instead said the burden should be on Democrats to pass the debt limit hike because President Obama has refused to engage with the GOP over how to reduce the deficit. “(President Obama) is the one driving up the debt. Then the question (Republicans) are asking is, ‘Well, why should I deal with his debt limit?’ And so the fact is we’ll let the Democrats put the votes up,” he said.
While it might have surprised some political watchers that Boehner would back down from his previous stance, investors are likely to be happy about the news. At least the nation’s debt rating is secure for the next year, until after the 2014 elections.
by Chris Roush
David Lieberman, the executive editor for Deadline.com, writes about the need for local media to improve their business and economics coverage.
His essay won the American Institute for Economic Research’s Women’s Economic Roundtable (WERT) Business Journalism Prize. The prize awards $2,000 to the best essay on an economic or financial topic written by a current or past recipient of the Columbia Journalism School’s Knight-Bagehot Fellowship in Economics and Business Journalism.
Lieberman writes, “Some news providers are trying to improve things. A University of Missouri School of Journalism professor recently launched Missouri Business Alert to fill the gap in local economic news. Digital First Media’s Connecticut Newsroom, which serves local newspapers and sites across the state, just assigned a reporter to cover poverty full time. A few years ago the Pocono Record assigned staffers to cover high-impact topics such as development and growth, traffic, and infrastructure—and let stringers cover town council and school board meetings. And the Institute for Policy Studies launched the Economic Hardship Reporting Project in 2011 to help bring stories about poverty and economic insecurity ‘to the center of the national conversation.’
“It’s too early to say whether these initiatives or others will unearth a business model to pay for serious local economic news. In the meantime, the press and its allies should encourage it in other ways. Colleges and universities can offer additional seminars to help journalists become financially literate. Many have to learn the basics: the difference between a deficit and a debt, how the bond market works, what’s meant by concepts such as the ‘multiplier effect’ —as well as how to find, and interpret, key reports and documents. The profession also needs programs outside of the major cities that can train reporters to deal with local needs. A community built on agriculture has different priorities than other areas that depend on manufacturing, technology, tourism, finance, oil production, or trade.
“Universities and professional associations also must reconsider their concept of prestige to give reporters who do superior work each day covering local business and economic issues a fighting chance to be recognized. Sponsors of journalism prizes should start by changing the way they’re judged to mimic Most Valuable Player awards in sports. Experts follow athletes’ day-to-day contributions and then pro-actively choose the winners. But in journalism, judges typically aren’t expected to know anything about the candidates. Applicants bear the burden of impressing them with samples of their work. The arrangement stacks the deck in favor of reporters who produce a few high-impact stories and against those who cover demanding beats well every day.”
Read more here.
by Liz Hester
Just when it seemed like the economy was on an up swing and recovery underway, the debt ceiling is rearing its ugly head– again. Treasury Secretary Jacob Lew warned Congress on Monday that the borrowing limit needed to be increased so the government could continue to function.
Damien Paletta had this story in the Wall Street Journal:
A fresh battle over the debt ceiling is looming, and lawmakers will have less time and flexibility to negotiate than in earlier fights because of the annual rush of people seeking tax refunds this month.
Treasury Secretary Jacob Lew on Monday urged Congress to intervene quickly to raise the debt limit, the latest in a drumbeat of warnings from the Obama administration that dawdling could potentially lead to delays or cuts in Social Security benefits and military pay.
In October, as part of the deal that ended the government shutdown, Congress suspended the borrowing limit until Feb. 7. After that, the Treasury Department is expected to use emergency measures, such as halting certain pension payments, to allow it to continue borrowing money to pay the government’s bills. Those powers will run out by the end of the month, Mr. Lew said, a much shorter fuse than during previous fights.
“Without borrowing authority, at some point very soon, it would not be possible to meet all of the obligations of the federal government,” Mr. Lew said in a speech to the Bipartisan Policy Center.
Enforcement of the debt limit is suspended, but it will come back into force Friday under the terms of a deal lawmakers struck in the fall. That leaves Lew bumping up against the limit in tax-filing season, he said Monday, when he will have far less flexibility to juggle the books and ward off disaster.
“Unlike other recent periods when we have had to use extraordinary measures to continue financing the government, this time these measures will give us only a brief span of time,” Lew said in a speech at the Bipartisan Policy Center. “Given these realities, it is imperative that Congress move right away to increase our borrowing authority.”
Congress, meanwhile, is moving at a relatively glacial pace. House Speaker John A. Boehner (R-Ohio) said last week that he will not permit the nation to default on its debt. But House Republicans emerged from their annual policy retreat without a plan for bartering with Democrats in exchange for raising the debt limit.
The most popular option under discussion by Republicans would combine a one-year extension of the debt limit with a ban on “bailouts” for health-insurance companies under the Affordable Care Act.
But Democrats say that the provisions dubbed “bailouts” by the GOP are necessary to ease the transition into the health-care law’s public marketplaces — and were employed when Republicans set up a similar system for the Medicare Part D prescription-drug program.
The Financial Times story by James Polti detailed the most recent history of the debt ceiling debate, which has many twists and turns recently:
The White House emerged triumphant from the last budgetary stand-off in October, when a 16-day government shutdown and brush with sovereign default was mostly blamed on Republican intransigence. Republicans recovered politically shortly afterwards as a result of the botched rollout of the 2010 health law. But they appeared to have learnt their lesson and are reluctant to force a new high-profile budget battle, even if it means triggering a backlash from conservative Tea Party members.
In December, Paul Ryan, the Republican chairman of the House budget committee, brokered a deal with Patty Murray, the Democratic chair of the Senate budget committee, to set spending levels for two years and avoid new federal shutdowns. But they avoided tackling the need to increase the debt ceiling, which is now looming.
In the recent past, Republicans have demanded huge concessions from the White House in exchange for debt ceiling increases, including deep spending cuts and a full repeal of the 2010 health law or a delay in its main provisions.
But this year, they are considering attaching much more modest policy changes as a condition of a debt ceiling increase, with the latest idea being to scrap some of the protections against big losses for insurers under “Obamacare” – the Affordable Care Act. But Mr Lew signalled the White House would continue to oppose negotiations over the debt ceiling, even in the face of sharply curtailed Republican ambitions.
The Reuters story did say the decrease in budget deficits had improved the nation’s finances:
U.S. politicians now partake in a regular dance around the country’s so-called debt limit. First, Congress authorizes spending that outstrips tax receipts. Then lawmakers balk over whether to OK enough borrowing to pay the bills. A rancorous debate ensues over putting public finances on a stable path.
Washington has danced perilously close to the edge of default several times since 2011, and this year some Republicans pledge to extract policy concessions from Democrats before they allow the debt limit to rise.
The administration has vowed not to negotiate on the matter, and Lew said public finances are in good enough shape that long-term fiscal problems don’t have to be solved this year anyway.
Federal debt ballooned during the 2007-09 recession and most analysts think Washington’s obligations to pay for health care for the elderly will stress the budget more as U.S. society ages.
But Lew said the sharp reduction in budget deficits over the last few years has bought America time to improve its fiscal outlook.
It’s impossible to say what would happen if Congress didn’t raise the debt limit. And while it’s unlikely to test it out, the fact that it’s even an issue is absurd. The economy shouldn’t be used in political brinkmanship.