Things to Read on the Afternoon of March 18, 2014

Must-Reads:

1. Gretchen Morgenson: A Loan Fraud War That’s Short on Combat: “In the years since the financial crisis of 2008, the Justice Department has been regularly questioned about a lack of criminal prosecutions related to the mortgage mess. Its responses have just about always been the same, whether in public speeches by Eric H. Holder Jr., the attorney general, or in interviews with Lanny A. Breuer, its former criminal division chief. Believe us, they would say, we’ve been working overtime on these matters; if there had been cases to make, we would have made them.Mr. Breuer was especially vocal with these talking points. But last week, a report from the inspector general of the Justice Department, Michael E. Horowitz, set the record straight. Sure enough, the report told us how hard the nation’s law enforcement officials had been investigating these cases. That is, hardly at all. The report, called “Audit of the Department of Justice’s Efforts to Address Mortgage Fraud,” covers the period from 2009 to 2011. It vindicates anyone who ever questioned the government’s claim that the reason there weren’t more mortgage-related fraud cases is because the cases just weren’t there to be made…”

2. Matthew O’Brien: The Fed Absolutely Shouldn’t Give Up on the Long-Term Unemployed: “Are the long-term unemployed just doomed today or doomed forever? That’s the question people are really asking when they ask if labor markets are starting to get “tight.” Now, it’s hard to believe that this is even a debate when unemployment is still at 6.7 percent and core inflation is just 1.1 percent. But it is. The new inflation hawks argue that these headline numbers overstate how much slack is left in the economy. That the labor force is smaller than it sounds, because firms won’t even consider hiring the long-term unemployed. That our productive capacity is lower than it sounds, because we haven’t invested in new factories for too long. And that wages and prices will start rising as companies pay more for the workers and work that they want. In other words, they think that the financial crisis has made us permanently poorer. That the economy can’t grow as fast as it used to, so inflation will pick up sooner than it used to—and we need to get ready to raise rates. (Notice how that’s always the answer no matter the question)…”

Should-Reads:

• Mike Elk: The Battle for Chattanooga: Southern Masculinity and the Anti-Union Campaign at Volkswagen

• Ta Nehisi Coates: on Condoleezza Rice: As Though Iraq Never Happened: “I don’t really understand how any editorial by Condoleezza Rice on conflict in Ukraine can fail to directly address the failures of the Iraq War. But here is Rice arguing for American godhead: ‘The notion that the United States could step back, lower its voice about democracy and human rights and let others lead assumed that the space we abandoned would be filled by democratic allies, friendly states and the amorphous “norms of the international community.” Instead, we have seen the vacuum being filled by extremists such as al-Qaeda reborn in Iraq and Syria; by dictators like Bashar al-Assad, who, with the support of Iran and Russia, murders his own people; by nationalist rhetoric and actions by Beijing that have prompted nationalist responses from our ally Japan; and by the likes of Vladimir Putin, who understands that hard power still matters. These global developments have not happened in response to a muscular U.S. foreign policy: Countries are not trying to “balance” American power. They have come due to signals that we are exhausted and disinterested. The events in Ukraine should be a wake-up call to those on both sides of the aisle who believe that the United States should eschew the responsibilities of leadership. If it is not heeded, dictators and extremists across the globe will be emboldened. And we will pay a price as our interests and our values are trampled in their wake.’ Condoleezza Rice was an important member of an administration that launched a war on false pretense and willingly embraced torture…. War-mongering is self-justifying. If you bungle a war in Iraq, it does not mean you need to sit back and reflect on the bungling. It means you should make more war, lest Iraq become a base for your enemies. If Vladimir Putin violates Ukrainian sovereignty, it is evidence for a more muscular approach. If he doesn’t, than it is evidence that he fears American power. If there are no terrorist attacks on American soil, then drones must be right and our security state must be effective. If there are attacks, then our security state must increase its surveillance, and more bombs should be dropped. Violence begets violence. Peace begets violence. The circle continues.”

• Ed Kilgore: “Populist” on the Margins: “A couple hundred words in, it became obvious that Douthat placed enormous symbolic emphasis on the possibility that the GOP would finally offer a tax reform plan that was not blatantly skewed to provide most of its rewards to corporations and top earners. That’s just a possibility…. So he ends on this note, which isn’t exactly the clarion trumpet call we would normally associate with ‘populism’ of any sort: ‘[T]here’s the possibility for evolution here, potentially. By the time the next presidential campaign arrives, the G.O.P. could still be groping in the policy darkness. But between the Camp blueprint and the initial Lee proposal, it has two rough drafts that could both influence a genuinely populist finished product — one that actually answers liberalism’s Obama-era pitch, and lets Republicans get back to making the kind of promises on taxes that used to win them elections, once upon a time.’ I suspect Douthat is living in the past more than a little here. Even if Republicans manage to bring themselves around to a tax proposal in which you can see some boon for the working poor and the working middle class buried in the distribution tables, there is a bigger and more obvious problem for Republican ‘populism’, which was actually identified pretty clearly by none other than Eric Cantor during the February House GOP retreat: a well-earned perception that conservatives do not value the contributions of labor…. Conservative hostility to popular measures to update the minimum wage and overtime rules isn’t helping—not to mention the emerging new GOP line that collective bargaining for wages and benefits should be wiped off the face of the earth—is making the problem worse. And these positions are getting a lot more attention than the details of tax reform proposals.”

Victor Fuchs: How to Shave $1 Trillion Out of Health Care | Colin Lewis: RobotEnomics | Tracking the march of the robot economy |

Should Be Aware of:

1. Kevin Drum: The Strange, Suicidal Odyssey of Dave Camp’s Tax Reform Plan: “The biggest ox being gored by Camp’s plan was Wall Street, which was very much not amused by his proposal to levy a small tax on large banks. They threatened to cancel all GOP fundraisers as long as the bank tax was on the table, and this was enough to bury Camp’s proposal once and for all. So far, so boring…. Jon Chait, however, gets at something more interesting: ‘The whole point of the push-back from Wall Street, which has reinforced a wildly unenthusiastic reception within the GOP, is not only to prevent Republicans from striking a deal with Democrats…. It’s to murder his plan in a public way so as to prevent it from becoming the baseline for any future Republican agenda. That effort seems to be meeting with predictable, depressing success…. Meeting all these goals was arithmetically impossible. But Republican fiscal proposals usually come face-to-face with arithmetic impossibility. It is their oldest and most bitter foe. Usually they step around with some kind of evasion or chicanery. Camp actually gave in’…. But here’s the thing… he knew that making the math work out would produce a plan that Republicans and their interest groups would hate. In the end, he could reduce the top rate only to 35 percent, and only at the cost of killing or reducing some very specific tax breaks that rich people didn’t want killed or reduced. Camp has been in Congress for more than two decades. He’s hardly an ivory tower naif, and he must have known perfectly well that his plan would do little except to expose Republican hypocrisy on taxes. So why did he do it?”

2. Digby: The Justice Department sends another message: “The report by the department’s inspector general undercuts the president’s contentions that the government is holding people responsible for the collapse of the financial and housing markets…. ‘In cities across the country, mortgage fraud crimes have reached crisis proportions’, Attorney General Eric H. Holder Jr. said at a mortgage fraud summit in Phoenix in 2010. ‘But we are fighting back’. The inspector general’s report, however, shows that the F.B.I. considered mortgage fraud to be its lowest-ranked national criminal priority. In several large cities, including New York and Los Angeles, F.B.I. agents either ranked mortgage fraud as a low priority or did not rank it at all…. ‘Despite receiving significant additional funding from Congress to pursue mortgage fraud cases, the F.B.I. in adding new staff did not always use these new positions to exclusively investigate mortgage fraud’, the report says…. Mr. Holder… announced in 2012 that prosecutors had charged 530 people over the previous year in cases related to mortgage fraud that had cost homeowners more than $1 billion. Almost immediately, the Justice Department realized it could not back up those statistics, the inspector general said. After months of review, it became clear that only 107 people were charged. The $1 billion figure… was actually $95 million, the inspector general said…”

And:

Liz Capo McCormick: Fund Futures Rate Guidance Even Lower Than Fed: Chart of the Day | Steven Greenhouse: Low-Wage Workers Are Finding Poverty Harder to Escape |