The conspiracy theory wing of the Tea Party scored a substantial victory last night, with Bill Randall prevailing in a runoff for the Republican candidacy in North Carolina's 13th Congressional district. In case you missed it, Randall has suggested that the Deepwater Horizon oil spill in the Gulf wasn't precipitated by non-existent safety inspections, a culture of self-regulation, a federal regulator in bed with the industry, etc., etc. Instead, Randall believes, the BP and federal government may have colluded to cause the Horizon rig to explode, crumble into the water, and begin spewing millions of barrels of oil into the Gulf each day. Last month, Randall had this to say about the spill:
Personally, and this is purely speculative on my part and not based on any fact, but personally I feel there is a possibility that there was some sort of collusion. I don't know how or why, but in that situation, if you have someone from a company violating a safety process and the government signing off on it, excuse me, maybe they wanted it to leak.
Now, Randall isn't the only public figure to claim to smell something funny about the spill. Former FEMA chief, Michael "Heckuva job, Brownie" Brown claimed Obama wanted the Deepwater spill to occur so he could shut down offshore oil drilling, and bloviator-in-chief Rush Limbaugh voiced his approval. But unlike his paranoid cohorts, Randall isn't a washed-up bureaucrat or a talking head—he's now the GOP's top candidate for a US representative.
Randall's defeat of moderate GOPer Bernie Reeves comes as somewhat of a surprise, but his chances this November against Democratic incumbent Brad Miller aren't that great. That is, unless he can convince North Carolinians that one of the biggest environmental catastrophes in US history was an inside job.
File this story in the so-outrageous-it-can-only-be-true folder. An veteran aide to Sen. David Vitter (R-La.), whom Vitter has tapped to handle women's issues, turns out to have pled guilty in 2008 to charges relating to a knife attack on an ex-girlfriend. Brent Furer, ABC News reports, was accused of threatening to kill the woman, putting his hand over her mouth, and cutting her hand and neck. Nonetheless, ABC says, Furer, who also has an open warrant in his name in Louisiana for a driving while intoxicated charge, still collects his $54,000, taxpayer-funded salary through the Senate.
For "Diaper Dave" Vitter, who was exposed in 2007 as a client of the DC Madam, the revelations about his women's issues aide again highlights the gulf between the senator's statements and his actions. Vitter's office told ABC that Furer was put on leave from the office while a court handled the 2008 case, and that "further significant disciplinary action" had been taken as well. Still, Furer did eventually return to work in the Louisiana senator's office.
The housing market is still a mess; foreclosures are mounting; unemployment hovers near 10 percent; and, as Treasury Secretary Tim Geithner said just today, "Our economy is still going through an incredibly difficult period." All of this stems from one of the worst financial crises in US history, a meltdown of epic proportions from which the country and the world has yet to fully recover.
That is, unless you're really, really rich. Bloombergreports today that the super wealthy's riches have all but returned to their swollen, pre-meltdown levels, according to a report by Capgemini SA and Merrill Lynch. Of the 10 million people globally with $1 million or more to invest in whatever they want, their wealth rose nearly 19 percent in 2009, to $39 trillion. In 2007, just before the train sped off the cliff, that wealth was $40.7 trillion spread among 10.1 million really rich people. (Let's not mention 2008—these 10 million people's wealth amounted to only $32.8 trillion. A down year, there.)
Here's more from Bloomberg:
The U.S. had 2.87 million millionaires, more than triple second-ranked Germany with 861,500, the report said. The number of millionaires in China soared 31 percent to 477,400, keeping the country ahead of the U.K. with 448,100.
Ultra-high net worth individuals with more than $30 million to invest saw their wealth rise by 21.5 percent in 2009, faster than other millionaires, according to the report, which attributed the gain to a "more effective re-allocation of assets."
Last month, I reported on a glaring omission in the Senate's 1,500-page financial reform bill: private student lenders, once described by New York Attorney General Andrew Cuomo as the "Wild West" of lending. These lenders, like juggernaut Sallie Mae, who often cater to subprime borrowers, saw the dollar amount of their loans grow from $7.2 billion to $15 billion between the 2003-04 and 2007-08 academic years. Over that same period, the percentage of students with private loans climbed from 5 percent (935,000 borrowers) to 14 percent in 2007-08 (nearly 3 million). Accompanying that growth, though, have been rampant predatory lending complaints, from peddling usurious interest rates to targeting the homeless and other people obviously without the means to pay off tens of thousands of dollars in debt.
Last night, top House lawmakers announced that private student lenders' exemption is all but dead. The House's conferees, who together with top sentators are trying to merge the chambers' two financial reform bills, offered new rules that would subject private student lenders—along with payday lenders, check cashers, and money remitters, among others—to oversight under a new Consumer Financial Protection Bureau. What's more, House conferees want to mandate that private student lenders get certification from a student's college before giving that student a private loan. This certification ensures that students are actually eligible for loans of any kind, and if so, that they've exhausted all options for receiving federal loan money, which carries lower interest rates and is generally safer than private loans.
These changes proposed by the House would go a long way toward to cracking down on abuses in the private student loan business, while letting the honest lenders who provide a necessary service to students go about their business. Now, it's up to the Senate, who left these lenders off the hook in the first round, to get on board.
[UPDATE]: The Senate today accepted the House's exemption for car dealers from oversight by a new Consumer Financial Protection Bureau. The two leaders of the House-Senate conference process—Rep. Barney Frank (D-Mass.) and Sen. Chris Dodd (D-Conn.)—opposed the exemption, but acceded to colleagues who had pushed hard for the exemption.
Of all the special interest groups swarming Washington's financial reform debate, you could argue that the award for Most Pesky belongs to the auto dealer lobby. For the past year, auto dealers and their water-carriers on Capitol Hill have vehemently opposed new oversight and regulation under the proposed Consumer Financial Protection Bureau, whose jurisdiction would include mortgage brokers, payday lenders, and other businesses that lend money to consumers. Auto dealers make up 80 percent of the nation's automotive loans. Nevertheless, in the House's reform bill, they succeeded in winning an exemption from the bureau's oversight. (The Senate did not exempt them.) Now, in the latest announcement by top House members trying to reconcile the House and Senate's respective bills, the House is offering an amendment that would ensure dealers are exempt from oversight in the final bill.
If any type of retailer and/or lender cries out for new oversight, it's auto dealers. In 2009, dealer-related complaints ranked fourth-highest among all types of consumer-based complaints, at 26,019, after cell phone service companies, TV companies, and—big surprise—banks. The Center for Responsible Lending has reported that dealers frequently peddle higher interest rates to customers than would a regular bank, and that these "markups" amount to an extra $20 billion a year for consumers.
Throughout the past year's reform fight, groups ranging from the Navy Marine Corps Relief Society and the National Consumer Law Center have pushed hard to include dealers in any new consumer bureau's purview. (The military is especially active on dealer regulation because, as Mother Jones' Stephanie Mencimer has reported, shady dealers often prey on vulnerable servicemen and -women.) In a May letter to Sen. Sam Brownback (R-Kan.), who had sought an exemption for dealers in the Senate's bill, military and consumer advocacy groups wrote:
For example, some car dealers engage in "powerbooking," a scam in which the victim does not have access to the documents the dealer submits to the finance company and therefore has no knowledge of the phantom add-ons the auto dealer claims are part of the vehicle. Some dealers falsify loan applications, in which case the victim does not have access to the loan documents that falsifies pay stubs and statements of income. In another scam, the auto dealer promises to pay off the lien on the victim’s trade-in at the time of sale, but does not, so the consumer is unknowingly left with the responsibility to pay off the new car as well as the car that was traded in. There is no way for the victim to know in advance that the dealer doesn’t intend to pay off the lien. Senator Brownback’s modified amendment would do nothing to stop these abuses.
The House and Senate's new consumer protection bureau was created, lawmakers have said, to reign practices like powerbooking and auto lien fraud. Even President Obama has personally stepped in to fend off an auto-dealer exemption, saying in May, "The fact is, auto dealer-lenders make nearly 80 percent of the automobile loans in our country, and these lenders should be subject to the same standards as any local or community bank that provides loans." The House conferees, who meet again this week to hash out differences in their reform bill, apparently don't agree.