regulators focusing in on foreclosure crisis

Video - politicians and regulators taking a closer look at foreclosure crisis.

WaPo | A congressional oversight panel is set to warn on Tuesday that a widespread problem of flawed and fraudulent foreclosure paperwork could upend the housing market and undermine the nation's financial stability, just as the issue is coming under greater scrutiny this week in Washington.

The report, issued by the Congressional Oversight Panel, which monitors the government's bailout program, marks the first time a federal watchdog has weighed in on the nationwide foreclosure mess.

The panel echoed concerns raised by consumer advocates and financial analysts, who have said that although the consequences of the foreclosure debacle remain unclear, the problems could throw into doubt the ownership not only of foreclosed properties but also the millions of ordinary mortgages that were pooled and traded by investors around the world.

The report is scheduled to be released in the morning, just before the Senate Banking Committee holds a hearing on the matter and as lawmakers are considering several legislative responses.

The spotlight on the foreclosure process has anxious financial executives mobilizing on Capitol Hill. A financial lobbyist said senior executives have been meeting with lawmakers and their staffers, and industry groups are planning letter campaigns aimed at preventing any aggressive new legislation.

"Everyone's very nervous about what's going to happen this week," said another industry official, who spoke on condition of anonymity because his firm has a stake in the outcome. "We have all hands on deck."

It's unclear what new measure could pass in a politically divided Congress, but some ideas under consideration could broadly reshape the mortgage industry.

Some lawmakers want to resurrect legislation that would give bankruptcy judges the power to order lenders to reduce the principal that homeowners owe. Others are pushing for some big banks to spin off their mortgage-servicing arms to avoid conflicts of interest. There's also discussion of the federal government replacing the industry's current system for tracking mortgages with one that would be subject to federal regulation.

"The risk is small that a bill gets through," the financial lobbyist said. But, he added: "We are taking it very seriously."

highest foreclosure rate and 80% underwater

Sun | Las Vegas home values as measured by Zillow fell 4.2 percent in the third quarter and pushed the region’s percentage of underwater properties to 80.2 percent.

The number of homes underwater -- when property owners owe more on their mortgage then the home is worth -- increased from 78.1 percent in the second quarter, the Seattle-based firm reported. Phoenix ranked second with 68 percent underwater during the third quarter.

“The high percentage of homeowners in negative equity continues to be troubling in that it represents a huge number of people who are not only more vulnerable to foreclosure but who are essentially trapped in their current homes and are prevented from selling and buying a new home,” said Zillow Chief Economist Stan Humphries. “This has profound implications for future demand and will be a millstone around the neck of the housing market.”

In September, 39 percent of homes sold in Las Vegas were for a loss, up from 20 percent in September 2009. Nationally, 27 percent of the homes sold in September were for a loss, the firm reported.

Zillow, which says it measures the value of all homes and not just those sold, reported home values have fallen 58 percent since their peak in May 2006 -- back to August 2000 levels.

In Las Vegas, 47 percent of all home sales in September were foreclosure sales, down from 49 percent in September 2009. Nationally, foreclosures comprised 20 percent of all sales.

just like in the hood....,

LATimes | About 30,000 people have been killed in Mexican cartel violence since President Felipe Calderon started deploying troops to take on the drug and gun traffickers in December 2006. Nearly 70,000 U.S.-originated firearms were recovered in Mexico between 2007 and 2009.

About 7,000 licensed U.S. gun dealers operate near the 2,000-mile border, and cartel leaders often hire straw buyers to purchase firearms and pay others to transport the weapons into Mexico. Just as the drugs flow steadily north, the guns reach Mexico secreted under truck beds or stashed in car trunks, sometimes even hidden in clothing.

ATF officials defended their marquee program, named Project Gunrunner, saying it has gone a long way in combating the illegal flow of U.S. firearms into Mexico since it was started in Texas in 2005 and expanded nationwide a year later.

Kenneth E. Melson, the ATF's deputy director, said in a lengthy rebuttal letter to the inspector general's report that there had been "significant accomplishments," with gun investigations up by 109% and prosecutions up by 54% under the project.

But he said a reduction in funds had limited some gun-tracing operations and had stalled attempts by the ATF to place more U.S. agents in Mexican police stations to work on joint investigations.

can mexico be saved?

WSJ | Cleaning up the mess here will require the proper diagnosis, and I ask the mayor to share his. "If you have the biggest consumer of drugs just beside your [border] and you have a lot of people here who have no opportunity, you have the culture for insecurity," he tells me. But the mayor doesn't dwell on what he cannot change. Instead he zeroes in on Mexico. "The real causes that are generating the insecurity in Juárez and all over Mexico are lack of opportunity, lack of education, lack of [necessities], impunity, lack of justice. It is a mixture of a lot of problems where we Mexicans haven't done our homework," he says.

"People who think they are going to fix [the problem] with policemen and arms are completely crazy." Instead, he wants to see Mexico "make the changes in the fiscal policies to encourage investments that create jobs."

To capture the desperation of Mexico's young, the mayor-elect shares an anecdote: "Last week, at a gas station here, I met an 18-year-old. He told me 'Teto, you politicians don't know anything. You don't understand that without hope we have no future. We prefer to die in one year standing up than living all our lives on our knees.'" Summing it up, Mr. Murguia says, "When people lose hope they will do anything [to improve their circumstances]."

By Mr. Murguia's measure, Juárez was a place of hope not so long ago. "Juárez for 40 years, from 1965-2005, was the city that generated the most jobs per capita in all of Mexico. And those jobs were not only for juarenses," he says proudly. "People came from Oaxaca, Zacatecas, Veracruz because they couldn't find jobs in their own city. Some of them tried to cross the river but a lot of them found a job in Juárez."

What went wrong? The mayor-elect blames Mexico's revenue sharing model. "The investment that the federal and state government makes in Juárez does not correspond to what the city sends in federal taxes." He complains that though the city created jobs for the nation, investments in "public services, streets, schools, parks, community centers and health-care centers haven't corresponded to the job growth. We were forgotten." He wants the federal government and the state "to return to Juárez what they owe us."

military report warns sudden collapse of mexico possible

usjfcom | Mexico is one of two countries that "bear consideration for a rapid and sudden collapse," according to a report by the U.S. Joint Forces Command on worldwide security threats.

The command's "Joint Operating Environment (JOE 2008)" report, which contains projections of global threats and potential next wars, puts Pakistan on the same level as Mexico. "In terms of worse-case scenarios for the Joint Force and indeed the world, two large and important states bear consideration for a rapid and sudden collapse:
Pakistan and Mexico.

"The Mexican possibility may seem less likely, but the government, its politicians, police and judicial infrastructure are all under sustained assault and press by criminal gangs and drug cartels. How that internal conflict turns out over the next several years will have a major impact on the stability of the Mexican state. Any descent by Mexico into chaos would demand an American response based on the serious implications for homeland security alone."

florida's foreclosure rocket docket

Rolling Stone | The foreclosure lawyers down in Jacksonville had warned me, but I was skeptical. They told me the state of Florida had created a special super-high-speed housing court with a specific mandate to rubber-stamp the legally dicey foreclosures by corporate mortgage pushers like Deutsche Bank and JP Morgan Chase. This "rocket docket," as it is called in town, is presided over by retired judges who seem to have no clue about the insanely complex financial instruments they are ruling on — securitized mortgages and laby­rinthine derivative deals of a type that didn't even exist when most of them were active members of the bench. Their stated mission isn't to decide right and wrong, but to clear cases and blast human beings out of their homes with ultimate velocity. They certainly have no incentive to penetrate the profound criminal mysteries of the great American mortgage bubble of the 2000s, perhaps the most complex Ponzi scheme in human history — an epic mountain range of corporate fraud in which Wall Street megabanks conspired first to collect huge numbers of subprime mortgages, then to unload them on unsuspecting third parties like pensions, trade unions and insurance companies (and, ultimately, you and me, as taxpayers) in the guise of AAA-rated investments. Selling lead as gold, shit as Chanel No. 5, was the essence of the booming international fraud scheme that created most all of these now-failing home mortgages.

The rocket docket wasn't created to investigate any of that. It exists to launder the crime and bury the evidence by speeding thousands of fraudulent and predatory loans to the ends of their life cycles, so that the houses attached to them can be sold again with clean paperwork. The judges, in fact, openly admit that their primary mission is not justice but speed. One Jacksonville judge, the Honorable A.C. Soud, even told a local newspaper that his goal is to resolve 25 cases per hour. Given the way the system is rigged, that means His Honor could well be throwing one ass on the street every 2.4 minutes.

Foreclosure lawyers told me one other thing about the rocket docket. The hearings, they said, aren't exactly public. "The judges might give you a hard time about watching," one lawyer warned. "They're not exactly anxious for people to know about this stuff." Inwardly, I laughed at this — it sounded like typical activist paranoia. The notion that a judge would try to prevent any citizen, much less a member of the media, from watching an open civil hearing sounded ridiculous. Fucked-up as everyone knows the state of Florida is, it couldn't be that bad. It isn't Indonesia. Right? Fist tap Dale.

unprecedented decline in home values with no end in sight

Business Insider | Zillow just released a devastating third quarter housing report. Basically every major indicator is crashing:

* The decline in home values accelerated in September, dropping 0.4% month-over-month
* Foreclosures reached an all-time high
* A record 23.2% of mortgages are now underwater

The double dip -- already a rare phenomenon -- is now entering an unprecedented free-fall. Zillow economist Stan Humphries says prices won't hit bottom until next summer at the earliest, as foreclosure activity grows.

Humphries warns: “While not unexpected, the unceasing declines in home values signal that we’re in for a long, bleak winter of continued troubles for the housing market. The length and depth of the current housing recession is rivaling the Great Depression’s real estate downturn, and, with encouraging signs fading, will easily eclipse it in the coming months."

one of murdoch's lying liars crosses the line

CSMonitor | “For a political commentator or entertainer to have the audacity to say – inaccurately – that there's a Jewish boy sending Jews to death camps, as part of a broader assault on Mr. Soros, that's horrific,” said Abraham Foxman, director of Anti-Defamation League (ADL) and a Holocaust survivor.

“While I, too, may disagree with many of Soros' views and analysis on the issues, to bring in this kind of innuendo about his past is unacceptable," said Foxman in a statement. "To hold a young boy responsible for what was going on around him during the Holocaust as part of a larger effort to denigrate the man is repugnant.”

Commentary magazine, the neoconservative publication founded in 1945 by the American Jewish Committee, has long been critical of Soros. But on the publication’s website, executive editor Jonathan Tobin writes:

“Beck is in no position to pontificate about the conduct of Holocaust survivors and should refrain from even commenting about this subject…. Such topics really must be off-limits, even in the take-no-prisoners world of contemporary punditry.”

Tobin continues: “There is much to criticize about George Soros’s career, and his current political activities are troubling. But Beck’s denunciation of him is marred by ignorance and offensive innuendo. Instead of providing sharp insight into a shady character, all Beck has done is further muddy the waters and undermine his own credibility as a commentator.”

the big lie

The Atlantic | It seems to me that the last year or so in America's political culture has represented the triumph of untruth. And the untruth was propagated by a deliberate, simple and systemic campaign to kill Obama's presidency in its crib. Emergency measures in a near-unprecedented economic collapse - the bank bailout, the auto-bailout, the stimulus - were described by the right as ideological moves of choice, when they were, in fact, pragmatic moves of necessity. The increasingly effective isolation of Iran's regime - and destruction of its legitimacy from within - was portrayed as a function of Obama's weakness, rather than his strength. The health insurance reform - almost identical to Romney's, to the right of the Clintons in 1993, costed to reduce the deficit, without a public option, and with millions more customers for the insurance and drug companies - was turned into a socialist government take-over.

Every one of these moves could be criticized in many ways. What cannot be done honestly, in my view, is to create a narrative from all of them to describe Obama as an anti-American hyper-leftist, spending the US into oblivion. But since this seems to be the only shred of thinking left on the right (exacerbated by the justified flight of the educated classes from a party that is now openly contemptuous of learning), it became a familiar refrain - pummeled into our heads day and night by talk radio and Fox. If you think I'm exaggerating, try the following thought experiment.

If a black Republican president had come in, helped turn around the banking and auto industries (at a small profit!), insured millions through the private sector while cutting Medicare, overseen a sharp decline in illegal immigration, ramped up the war in Afghanistan, reinstituted pay-as-you go in the Congress, set up a debt commission to offer hard choices for future debt reduction, and seen private sector job growth outstrip the public sector's in a slow but dogged recovery, somehow I don't think that Republican would be regarded as a socialist.

This is the era of the Big Lie, in other words, and it translates into a lot of little lies - "death panels," "out-of-control" spending, "apologies for America" etc. - designed to concoct a false narrative so simple and so familiar it actually succeeded in getting into people's minds in the midst of a brutal recession. And integral to this process have been conservative "intellectuals" who should and do know better, but have long since sacrificed intellectual honesty for the cheap thrills of enabling power-grabs. And few lies represent this intellectual cooptation of talk radio/FNC propaganda better than the lie that Obama has publicly rebutted the idea of American exceptionalism.

Where does one start? Where one always starts with these things - Jonah Goldberg:

oil will run dry before substitutes roll out

Physorg | At the current pace of research and development, global oil will run out 90 years before replacement technologies are ready, says a new University of California, Davis, study based on stock market expectations.

The forecast was published online Monday (Nov. 8) in the journal Environmental Science & Technology. It is based on the theory that long-term investors are good predictors of whether and when new energy technologies will become commonplace.

"Our results suggest it will take a long time before renewable replacement fuels can be self-sustaining, at least from a market perspective," said study author Debbie Niemeier, a UC Davis professor of civil and environmental engineering.

Niemeier and co-author Nataliya Malyshkina, a UC Davis postdoctoral researcher, set out to create a new tool that would help policymakers set realistic targets for environmental sustainability and evaluate the progress made toward those goals.

Two key elements of the new theory are market capitalizations (based on stock share prices) and dividends of publicly owned oil companies and alternative-energy companies. Other analysts have previously used similar equations to predict events in finance, politics and sports.

"Sophisticated investors tend to put considerable effort into collecting, processing and understanding information relevant to the future cash flows paid by securities," said Malyshkina. "As a result, market forecasts of future events, representing consensus predictions of a large number of investors, tend to be relatively accurate."

Niemeier said the new study's findings are a warning that current renewable-fuel targets are not ambitious enough to prevent harm to society, economic development and natural ecosystems.

"We need stronger policy impetus to push the development of these alternative replacement technologies along," she said.

wheat bread $23.00 a loaf?!?!

NaturalNews | Within a decade, a loaf of wheat bread may cost $23 in a grocery store in the United States, and a 32-oz package of sugar might run $62. A 64-oz container of Minute Maid Orange Juice, meanwhile, could set you back $45.71. This is all according to a new report released Friday by the National Inflation Association which warns consumers about the coming wave of food price inflation that's about to strike the western world.

Authored by Gerard Adams (no relation to myself, Mike Adams), this report makes the connection between the Fed's runaway money creation policy ("quantitative easing") and food price inflation.

"For every economic problem the U.S. government tries to solve, it always creates two or three much larger catastrophes in the process," said Adams. "Just like we predicted this past December, the U.S. dollar index bounced in early 2010 and has been in free-fall ever since. Bernanke's QE2 will likely accelerate this free-fall into a complete U.S. dollar rout."

The upshot of a falling dollar will mean rampant price inflation on the basic goods and services that Americans depend on to survive. Food in particular is likely to be hit hard by price inflation within the decade.

The National Inflation Association has released its food price projections in a free downloadable PDF file here: http://inflation.us/foodpriceprojec...

It offers statements like this: "NIA is confident that the upcoming monetization of our debt will send nearly all agricultural commodities soaring to new all time inflation adjusted highs."

The Federal Reserve, of course, is currently engaged in the most massive money counterfeiting operation the world has ever witnessed. And it seems determined to keep printing money until all the dollars the rest of us hold are near-worthless.

why I no longer believe religion is a virus of the mind

Guardian | Are religions viruses of the mind? I would have replied with an unequivocal "yes" until a few days ago when some shocking data suggested I am wrong.

This happened at a conference in Bristol on "Explaining religion". About a dozen speakers presented research and philosophical arguments, mostly falling into two camps: one arguing that religions are biologically adaptive, the other that they are by-products of cognitive mechanisms that evolved for other reasons. I spoke first, presenting the view from memetics that religions begin as by-products but then evolve and spread, like viruses, using humans to propagate themselves for their own benefit and to the detriment of the people they infect.

This idea began with Richard Dawkins's The Selfish Gene, was developed in his later article "Viruses of the mind" and taken up by others, including myself in The Meme Machine and other works. It is one version of "dual-inheritance" theory in which genes and culture are both seen as evolving systems.

The idea is that religions, like viruses, are costly to those infected with them. They demand large amounts of money and time, impose health risks and make people believe things that are demonstrably false or contradictory. Like viruses, they contain instructions to "copy me", and they succeed by using threats, promises and nasty meme tricks that not only make people accept them but also want to pass them on.

This was all in my mind when Michael Blume got up to speak on "The reproductive advantage of religion". With graph after convincing graph he showed that all over the world and in many different ages, religious people have had far more children than nonreligious people.

The exponential increase in the Amish population might be a one off, as might Catholics having lots of children, but a comparison of religious and nonaffiliated groups in the USA, China, Sweden, France and other European countries showed that the number of children per woman in religious groups ranged from close to zero (for the Shakers) to between six and seven for the Hutterites, Amish and Haredim, while the nonaffiliated averaged less than two per woman – below replacement rate.

Data from 82 countries showed almost a straight line plot of the number of children against the frequency of religious worship, with those who worship more than once a week averaging 2.5 children and those who never worship only 1.7 – again below replacement rate. In a Swiss census of 2000 the nonaffiliated had the lowest number of births at 1.1 per woman compared with over two among Hindus, Muslims and Jews.

the privatization of war: mercenaries, private military and security companies (PMSC)

globalresearch | In 1961, President Eisenhower warned the American public opinion against the growing danger of a military industrial complex stating: “(…) we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defence with our peaceful methods and goals, so that security and liberty may prosper together”.

Fifty years later, on 8 September 2001, Donald Rumsfeld in his speech in the Department of Defence warned the militaries of the Pentagon against “an adversary that poses a threat, a serious threat, to the security of the United States of America (…) Let's make no mistake: The modernization of the Department of Defense is (…) a matter of life and death, ultimately, every American's. (…) The adversary. (…) It's the Pentagon bureaucracy. (…)That's why we're here today challenging us all to wage an all-out campaign to shift Pentagon's resources from bureaucracy to the battlefield, from tail to the tooth. We know the adversary. We know the threat. And with the same firmness of purpose that any effort against a determined adversary demands, we must get at it and stay at it. Some might ask, how in the world could the Secretary of Defense attack the Pentagon in front of its people? To them I reply, I have no desire to attack the Pentagon; I want to liberate it. We need to save it from itself."

Rumsfeld should have said the shift from the Pentagon’s resources from bureaucracy to the private sector. Indeed, that shift had been accelerated by the Bush Administration: the number of persons employed by contract which had been outsourced (privatized) by the Pentagon was already four times more than at the Department of Defense.

It is not anymore a military industrial complex but as Noam Chomsky has indicated "it's just the industrial system operating under one or another pretext”.

The articles of the Washington Post “Top Secret America: A hidden world, growing beyond control”, by Dana Priest and William M. Arkin (19 July 2010) show the extent that “The top-secret world the government created in response to the terrorist attacks of Sept. 11, 2001, has become so large, so unwieldy and so secretive that no one knows how much money it costs, how many people it employs, how many programs exist within it or exactly how many agencies do the same work”.

The investigation's findings include that some 1,271 government organizations and 1,931 private companies work on programs related to counterterrorism, homeland security and intelligence in about 10,000 locations across the United States; and that an estimated 854,000 people, nearly 1.5 times as many people as live in Washington, D.C., hold top-secret security clearances. A number of private military and security companies are among the security and intelligence agencies mentioned in the report of the Washington Post.

The Working Group received information from several sources that up to 70 per cent of the budget of United States intelligence is spent on contractors. These contracts are classified and very little information is available to the public on the nature of the activities carried out by these contractors.

The privatization of war has created a structural dynamic, which responds to a commercial logic of the industry.

shall the religious inherit the earth?

Guardian | Europe, 2020. The Islamists have stormed to power across the continent. Every French woman is forced to be veiled. Holland's gay clubs have been relocated to San Francisco.

Welcome to "Eurabia", Canadian author Mark Steyn's fantasy of what Europe will look like in a decade. According to Steyn's US bestseller America Alone: The End of the World As We Know It, Muslims are breeding like "mosquitoes", whereas the "European races" are "too self-absorbed to breed". Failure in the bedroom is allowing for the "recolonisation of Europe by Islam".

Steyn stands upon the more poisonous shores of anti-Muslim rhetoric. But the idea of Muslims breeding their way to power is becoming mainstream. Financial Times columnist Christopher Caldwell, Harvard historian Niall Ferguson and Catholic theologian George Weigel have all warned of a Europe walking blindly into a Muslim-dominated future. Now the liberal academic Eric Kaufmann, a political scientist at Birkbeck College, London, has entered the fray. In his new book, Shall the Religious Inherit the Earth?, based on data from demographic studies in Europe, America and Israel, Kaufmann adds a new twist to the Eurabia thesis. Don't worry so much about Muslims, he suggests. Just be very afraid of fundamentalists of all stripes.

the monoculture goes in on islam

Video - Sam Harris Science can answer moral questions.

Ted Talks | I'm going to speak today about the relationship between science and human values. Now, it's generally understood that questions of morality -- questions of good and evil and right and wrong -- are questions about which science officially has no opinion. It's thought that science can help us get what we value, but it can never tell us what we ought to value. And, consequently, most people -- I think most people probably here -- think that science will never answer the most important questions in human life: questions like, "What is worth living for?" "What is worth dying for?" "What constitutes a good life?"

So, I'm going to argue that this is an illusion -- that the separation between science and human values is an illusion -- and actually quite a dangerous one at this point in human history. Now, it's often said that science can not give us a foundation for morality and human values, because science deals with facts, and facts and values seem to belong to different spheres. It's often thought that there is no description of the way the world is that can tell us how the world ought to be. But I think this is quite clearly untrue. Values are a certain kind of fact. They are facts about the wellbeing of conscious creatures.

Why is it that we don't have ethical obligations toward rocks? Why don't we feel compassion for rocks? It's because we don't think rocks can suffer. And if we're more concerned about our fellow primates than we are about insects, as indeed we are, it's because we think they're exposed to a greater range of potential happiness and suffering. Now, the crucial thing to notice here is this is a factual claim: This is something that we could be right or wrong about. And if we have misconstrued the relationship between biological complexity and the possibilities of experience well then we could be wrong about the inner lives of insects.

And there is no notion, no version of human morality and human values that I've ever come across that is not at some point reducible to a concern about conscious experience and its possible changes. Even if you get your values from religion, even if you think that good and evil ultimately relate to conditions after death -- either to an eternity of happiness with God or an eternity of suffering in hell -- you are still concerned about consciousness and its changes. And to say that such changes can persist after death is itself a factual claim which, of course, may or may not be true. Fist tap Dale.

los ni nis

Time | Mexican media talk about a new category known as los ni nis or "neither nors" — young people who neither work nor study. There is a heated debate here about how many ni nis there are. Mexico's National University claims there are several million, although the government retorts that there are only a few hundred thousand.

One of the largest populations of ni nis is in Ciudad Juarez, considered by many to be the most murderous city on the planet. A recent report financed by the government found that 120,000 Juarez residents between the ages of 13 and 24 — or 45% of the population — were in neither formal work nor school. Many live in slums spreading up hills on the west side of the city, home to workers in the struggling assembly plant industry. On a visit to the Juarez west side earlier this year, I heard young people relate how criminal cartels are one of the only organizations that offer them work. That mafia will now pay a young person $1,000 per trip if he or she smuggles drugs over the border; the youths say the drug gangs will fork over as little as $100 for someone to carry out an assassination. Sandra Ramirez, a social worker in the slums, confirmed these alarming numbers. "It is only them [the cartels] that are coming to these kids and offering them anything," she says. "They offer them money, cell phones and guns to protect themselves. You think these kids are going to refuse? They have nothing to lose. They only see the day to day. They know they could die and they say so. But they don't care. Because they have lived this way all their lives."

what sorts of schools exist in banana republics?

WaPo | Highly stratified, just like the society. The very wealthy send their children to private schools of privilege, just as is becoming the norm here. The poor go to schools where they are daily reminded of their inferiority. How many ways do we have to remind our students of their academic inferiority? Could this be an unconscious or sub-rosa part of the high stakes we now attach to test scores? Is this perhaps part of the reason schools, teachers and communities are stigmatized when schools are condemned as failures and dropout factories? Our schools are inevitably mirrors of the society in which they function.

I must add here, lest I be accused of adopting a fatalistic stance, that I believe schools have a powerful role to play in cushioning the blows of poverty, of lifting the aspirations of our students beyond their circumstances.

But everywhere in school reform these days we hear of the need for "urgency," as if the reason that previous generations of educators failed to eliminate the achievement gap was a lackadaisical attitude, or persistent low expectations. Not so. Unfortunately, although schools can make a difference, poverty and a genuine lack of opportunity usually trumps our efforts.

The intense discomfort the "school reformers" have with our low-performing schools may reflect our unwillingness to recognize that yes, we have a growing underclass in the United States. Yes, we have a burgeoning strata of society that no longer can even grasp the bottom rung of the economic ladder.

We can blame the schools for this, but the schools did not create this situation, and getting everyone ready for college and careers will not fix it. Only when we get our economy back onto firm ground and restore some balance, so the wealthy are paying their fair share of taxes, and the middle class can survive and prosper, and the poor can truly access the ladder to success, only then will we see hope return to our students and see the gaps in achievement really begin to close.

our banana republic

NYTimes | The richest 1 percent of Americans now take home almost 24 percent of income, up from almost 9 percent in 1976. As Timothy Noah of Slate noted in an excellent series on inequality, the United States now arguably has a more unequal distribution of wealth than traditional banana republics like Nicaragua, Venezuela and Guyana.

In the past, many of us acquiesced in discomfiting levels of inequality because we perceived a tradeoff between equity and economic growth. But there’s evidence that the levels of inequality we’ve now reached may actually suppress growth. A drop of inequality lubricates economic growth, but too much may gum it up.

Robert H. Frank of Cornell University, Adam Seth Levine of Vanderbilt University, and Oege Dijk of the European University Institute recently wrote a fascinating paper suggesting that inequality leads to more financial distress. They looked at census data for the 50 states and the 100 most populous counties in America, and found that places where inequality increased the most also endured the greatest surges in bankruptcies.

Here’s their explanation: When inequality rises, the richest rake in their winnings and buy even bigger mansions and fancier cars. Those a notch below then try to catch up, and end up depleting their savings or taking on more debt, making a financial crisis more likely.

Another consequence the scholars found: Rising inequality also led to more divorces, presumably a byproduct of the strains of financial distress. Maybe I’m overly sentimental or romantic, but that pierces me. It’s a reminder that inequality isn’t just an economic issue but also a question of human dignity and happiness.

Mounting evidence suggests that losing a job or a home can rock our identity and savage our self-esteem. Forced moves wrench families from their schools and support networks.

In short, inequality leaves people on the lower rungs feeling like hamsters on a wheel spinning ever faster, without hope or escape.

Economic polarization also shatters our sense of national union and common purpose, fostering political polarization as well.

So in this postelection landscape, let’s not aggravate income gaps that already would make a Latin American caudillo proud. To me, we’ve reached a banana republic point where our inequality has become both economically unhealthy and morally repugnant.

florida’s SB 1070: all immigrants must carry papers, except canadians and europeans

Video - Gov. George Wallace 1963 Inauguration address.

Immigrant Rights | Well, folks, it appears we’ve come to the point where it’s not necessary to even feign non-racism any longer. You've seen the ads. Now, witness the draft of an immigration law modeled after Arizona’s SB 1070 “papers, please” law that takes the controversial tied-up-in-court-because-it’s-ridiculous law even further.

Tim Elfrink at Miami New Times (full disclosure: I work for the paper) reports that the law drafted by Florida state representative William Snyder, and supported by GOP gubernatorial candidate Rick Scott, includes a clause that "Even if an officer has 'reasonable suspicions' over a person's immigration status … a person will be ‘presumed to be legally in the United States’ if he or she provides ‘a Canadian passport’ or a passport from any 'visa waiver country.'" Elfrink points out that aside from four Asian countries, all other visa waiver countries are located in Western Europe.

What the…? Yep, that’s right. The Florida law in a nutshell: If you’re a white non-Hispanic, you’re presumed to be in the country legally and don’t need to show any proof. If you belong in the “all others” category, better carry your papers.

Of course, there’s an explanation for such blatant racism, as Snyder told a radio host: "What we're doing there is trying to be sensitive to Canadians. We have an enormous amount of ... Canadians wintering here in Florida … That language is comfort language."

Ah, yes tons of Canadians wintering here in Florida … along with MILLIONS of South Americans. In the biggest tourism destination in the state, Miami, people from South America comprise 52% of the visitors alone. That’s not even counting tourists from Central America and the Caribbean. These are people with plenty of disposable income, and plenty of tourism options. If Florida became a state suspicious of Latinos, they would just take their billions of dollars elsewhere. For a state whose economy relies so heavily on tourism, especially from Latin America, you’d think politicians would be a little bit more worried about making everyone feel comfortable. But that’s what makes it obvious this little clause isn’t about tourism at all. It’s about using every thin veil and pretense possible to try to legalize racial profiling. Fist tap Dale.

states rights

Video - Four days after Gov. George Wallace, Terry Sanford offered a different vision for North Carolina.

WaPo | Republicans' consolidation of power in state capitols is likely to expand the number of states that employ a far more limited, free-market-oriented approach to implementing the nation's new health-care law than the robust regulatory model favored by its supporters.

Although the law is a federal statute, it leaves states to administer many of its most important provisions and grants them considerable leeway.

It is up to states to run markets, known as "exchanges," through which individuals and small businesses will be able to buy health insurance plans, often with federal subsidies, beginning in 2014. States will also oversee a mostly federally funded expansion of Medicaid to cover a far larger share of the poor.

Many incoming Republican governors made their antipathy to the law a plank of their campaigns. Tennessee Gov.-elect Bill Haslam denounced it as "an intolerable expansion of federal power." Wyoming Gov.-elect Matt Mead promised to join 21 states contesting its constitutionality in federal courts. And Maine, one of the first states to set up a task force to implement the law, will now be led by Paul LePage, a tea party favorite who vowed to work against the legislation and predicted that voters would soon see headlines about him telling President Obama to "go to hell."

Such state leaders cannot block implementation of the law: If they are unwilling or deemed unready to run an exchange by 2014, the legislation empowers the federal government to step in with its own version. But the law does grant states a fair amount of discretion.

The result, analysts say, is that two models are likely to appear: Democratic governors and legislatures will probably emphasize vigorous regulation and government oversight, while Republican state leaders will probably put greater stock in privatization and other free-market approaches.

"The character of what emerges in each state will in large measure be driven by the philosophy of its governor," said Michael Leavitt, a former governor of Utah who served as secretary of health and human services under President George W. Bush and whom many conservative state leaders are now consulting.

Video - Daffy Hood meets Friar Porky.