New America on Ownership and Assets

While Hillary Clinton, Barack Obama and John McCain appear anxious to move into the White House, none of them have much to say about housing. Yet rarely a day goes by that the headlines don't mention the current housing crisis and its threat to the financial markets and the economy. This has led to a strange disconnect between the presidential campaigns and national reality.

Subprime lending and the ensuing foreclosures are being blamed for the crisis, but the problems and blame… more

The IRS was so confident in the legendary observation of Oliver Wendell Holmes, Jr. that “taxes are the price we pay for a civilized society” they chiseled it above the entrance to their Washington D.C. headquarters. Still each year Tax Day makes incumbent politicians uneasy -- especially at times when recession fears mount and fall elections loom. This year this perilous combination spurred them on to take prompt and bipartisan action. Who wants to be accused of sending families their… more

What if there’s a way to bring prepaid products to millions of new consumers, with the help of the federal government?

I think there is. By leveraging billions of dollars in annual tax refunds, there’s the potential to deliver a prepaid product that benefits consumers, industry and the government alike. Called the Assets and Transaction Account, or ATA for short, it’s envisioned as a network branded prepaid account that would be delivered through the tax filing process and loaded with tax… more

With foreclosures reaching record levels and predictions for further trouble ahead, the Federal Reserve Board on Tuesday unanimously approved potentially sweeping changes to how mortgages are marketed, made, and serviced, especially in the nonprime market. Will the Fed be able to meet its goal of a "comprehensive set of protections to consumers" when the comments come flying?

The proposed revisions to regulations under the Truth in Lending Act are designed to realign relationships in the mortgage business, so borrower and lender… more

Over a dozen financial institutions have applied to be the issuer of the Treasury Department's Direct Express electronic bank accounts for depositing Social Security and other federal benefits.

The Treasury touts the product as a safer, easier, and more convenient way to receive and access monthly benefits. In part, this is a strategy by the federal government to lower expenses for taxpayers by saving on the issuance of benefit checks. Compared with the 89 cents for sending a check… more

For better or worse, America has a habit of conducting much of our policymaking through the presidential election process. This can be dangerous when meaningful reform efforts get trumped by volatile politics. Sure, we’d like campaign promises to mean something but it’s counter-productive if we let the consideration of good ideas get easily diverted into the gutter.

A case in point was the recent discussion of Hillary Clinton’s Baby Bond proposal, which was quickly hijacked by partisan politics.… more

At a recent campaign stop with the Congressional Black Caucus, Sen. Hillary Rodham Clinton said, “I like the idea of giving every baby born in America a $5,000 account.”

That was enough to generate a few headlines and some right-wing outrage. The Drudge Report was quick to tweak one of its favorite targets and drive some Internet traffic with a bold banner, “A Bond for Every Bassinet.”

The conservative Washington Times and New York Post blasted the idea within 24… more

Countrywide Financial, the nation’s largest mortgage lender, has a curious new idea -- or, more precisely, an old one. No longer will it use wads of Chinese cash recycled through Wall Street to make subprime loans to unqualified borrowers. Instead, it will take in deposits from small savers and lend them out to people who might actually repay them -- just like that humble thrift institution president George Bailey did in It’s a Wonderful Life.

Imagine: a bank that promotes thrift!… more

In 1990, newspapers around the country profiled the story of Grace Capetillo, a welfare mom from Milwaukee who, after managing to save $3,000 in the bank, was hauled into court by the county Department of Social Services and charged with fraud. Having breached the limit on allowable assets, Ms. Capetillo was found guilty and ordered to pay a fine of $1,000, spend down another $1,000 of the money she had worked hard to save, and promise not to save again… more

The value of saving is finally making a comeback. After years of over consumption and accelerating debt -- and more than two years with a negative personal savings rate -- Americans are finally beginning to fret over their empty coffers and negative balance sheets. As headlines profile subprime borrowers going into default around the country, the average American’s sense of economic security has jumped from unease to panic. As policymakers scramble to develop new policies to bolster working families, echoes… more

When pets are poisoned by imported pet food or U.S. attorneys are fired under suspicious circumstances, Congress gears up hearings and vows quick action. A far greater scandal, however, has hardly gained the interest of legislators or the presidential candidates. That is the increasing wealth gap between the rich, the middle class and the poor, which is reaching alarming proportions.

The top 10% of income earners in the United States now owns 70% of the wealth, and the wealthiest 1% owns… more

The mayor of New York’s new antipoverty plan, which is scheduled to begin in the fall, will pay as much as $5,000 a year to poor families to help them meet specific goals like getting regular medical checkups, holding down full-time jobs and attending parent-teacher conferences.

Experience in developing countries shows that such ‘‘conditional cash transfer’’ programs are effective in combating poverty. Those who participate wind up with better education, health and life prospects than those who don’t. Such a… more

Governor Schwarzenegger was cheered when he recently talked about post-partisanship in Washington, D.C. But the post-partisan waters don’t run deep back home in California. Two state senators who just crossed the aisle to forward a creative solution to a pressing problem are getting more grief than glory.

Senator Darrell Steinberg, D-Sacramento, and Robert Dutton, R-Rancho Cucamonga, held a press conference on February 28 to introduce their bill to create a California Kids Account for every newborn. The goal is to… more

Imagine you’re a mortgage lender, and somebody comes to you with a marginal credit record, work experience that includes as many employers as Liz Taylor has had husbands and no Social Security number. Would you hand him a bunch of money to buy a house?

I’m guessing that you wouldn’t, especially not this week, what with the ongoing meltdown among sub-prime lenders -- those that specialize in making loans to people with shaky credit or erratic incomes.

But Leo Simpser well might.… more

Even though California is being modeled as the birthplace of post partisanship, ideological divisions still run deep in the political process. Two state senators who just crossed the aisle to forward a creative solution to a pressing state problem are getting more grief than glory.

Sens. Darrell Steinberg, D-Sacramento, and Robert Dutton, R-Rancho Cucamonga, held a press conference two weeks ago to introduce their bill to create a California KIDS Account for every newborn. The goal is to encourage parents… more

In the aftermath of Hurricane Katrina, which struck the Gulf Coast with such ferocity in late August 2005, Americans were shocked by the broadcast images of desperately poor people left to fend for themselves. The depth and consequences of poverty in America, normally hidden from public view, had once again become the subject of debate and national soul-searching. And yet, a year and a half later, the subject of poverty has fallen so far off the public’s radar screen that… more

They seemed so young. That’s what Peter Hero remembers most about the day, nine years ago, when Pierre Omidyar and Jeff Skoll walked into his office at Community Foundation Silicon Valley with an odd idea to give away a fortune. Omidyar wore jeans and a T-shirt; his thick black hair was tied back in a ponytail. Skoll had on what looked to Hero like a varsity jacket. He couldn’t still be in high school, could he? Hero thought they were… more

Next week the Commerce Department will release a pedestrian report that should produce a shocking headline in the papers: America’s Savings Rate at Lowest Level since the Great Depression. Indeed, 2006 marked the second consecutive year that the country’s personal savings rate was negative, matching the dubious performance of that bygone decade. Not only is our spending exceeding disposable income, but consumer debt is at record levels, making families especially vulnerable to rising interest rates and fluctuating incomes.

This wasn’t… more

When the California Working Families Policy Summit convenes Thursday in the Sacramento Convention Center, a familiar list of topics -- child care, after-school programs, cash assistance -- will dominate the agenda. These critical programs help families get by. What will be missing are bold proposals to help them get ahead.

The California Center for Research on Women and Families is sponsoring the summit for legislators and their staffs, administrative officials and other civic leaders to discuss public policy issues for this… more

In recent years, the idea of promoting widespread property ownership in the United States by means of public policy has enjoyed a renaissance across the political spectrum. George W. Bush and other American conservatives have borrowed the term "ownership society" from Margaret Thatcher's Britain and employed it to justify a range of proposals from the partial privatization of Social Security to individual health savings accounts. On the left, thinkers like Michael Sherraden and Bruce Ackerman, reviving a tradition that… more