Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Detroit News, the Guardian, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndrewKroll.

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Housing Recovery Hits Brick Wall

| Fri Feb. 26, 2010 1:14 PM EST

Is the housing recovery dead in the water?

The latest news from Foreclosureland sure seems to say that, dealing a death blow to projections that a recovery was imminent. In January, new data shows, new home sales plunged 11.3 percent to a record low, according to the Commerce Department. That drop brings home sales to their lowest point in nearly 50 years, and comes at a time when economists were predicting an increase of around 5 percent or so from December's totals. The budding recovery in the housing sector "has taken another big step back, even with the government aid," said Jennifer Lee, an economist at BMO Capital Markets, in a research note. That aid, including the Obama administration's multibillion-dollar Home Affordable Modification Program, its flagship relief effort, has done next to nothing to quell turmoil in the housing industry—turmoil showing little signs of abating.

Indeed, the housing industry appears to be at something of a crossroads right now. Just in the past week or so we've seen reports saying there are more "underwater" homeowners than ever before, at 11.3 million; that delinquencies (people late on their payments by 60 days or more) have been increasing for three years straight; but also that foreclosures are decreasing, according to recent data from the Mortgage Bankers Association, whose economist—perhaps prematurely—commented, "We are likely seeing the beginning of the end."

Well, if this is third and final act of the housing crisis, which began with subprime meltdown back in 2007, than you'd better get comfortable in your seats because this act apparently has quite a long way to go.

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Fed Fighting Senate Power Grab

| Fri Feb. 26, 2010 12:12 PM EST

Federal Reserve chairman Ben Bernanke went on the offensive yesterday before the Senate committee in charge of crafting comprehensive financial reform, fighting criticisms of the Fed and telling senators they'd be making a "grave mistake" if they neutered the Fed by taking away its bank oversight powers. Bernanke, who's gone from Time Man of the Year to clawing together enough support to win renomination, made his latest comments to Congress come amidst a renewed push by the Fed to save some of its regulatory muscle, which now includes oversight of both smaller banks and larger, too-big-to-fail institutions; another powerful Fed chief, Thomas Hoenig of the Kansas City Fed, also met with Sen. Michael Bennet (D-CO), Bloomberg reported, to lobby for the Fed retaining its existing powers. "The Fed comes to this with an imperfect track record, which I think is widely acknowledged," Bennet told Bloomberg. "The more important question for me is, what are we going to do to make sure we’re never in a position again."

The Fed's regulatory gaffes and disregard for consumer protection in the run-up to the crisis has been well documented. For instance, the Fed ignored years' worth of pleading by Midwestern advocacy groups about the growing waves of subprime lending in low-income communities; the Fed also waited years to enact new rules on predatory practices by credit card companies like excessive overdraft charges and "hair-trigger" interest rate increases. (The recent Credit CARD Act, however, has clamped down on the practices.) Still, the Fed has fielded widespread criticism inside and outside Washington for its laissez faire attitude to regulation in the past decade and in the run-up to the financial crisis. Sen. Chris Dodd (D-CT), chairman of the banking committee, has long called for stripping the Fed of its bank oversight powers, leaving to deal mostly with monetary policy.

One way of doing that would be the creating of an independent, standalone Consumer Financial Protection Agency, a organization to monitor dangerous financial products and practices like the Consumer Product Safety Commission regulates dangerous kids toys. However, the fate of an independent CFPA remains up in the air, and the Fed, it seems, could still retain some of its powers when the dust settles around a new financial reform bill. For one, Sen. Evan Bayh (D-IN), who's set to retire this fall, remarked yesterday, "The Fed should retain a robust role in the supervisory area. My strong impression is that you and your team have learned from the recent past." I guess we'll have to wait and see if that's true or not.

Firing Back in Wall St.'s Reform War

| Thu Feb. 25, 2010 11:07 AM EST

Americans for Financial Reform, a leading advocacy group lobbying for major regulatory crackdowns on Wall Street, released a new ad today coming to the defense of Sen. Jon Tester (D-MT), who's been under fire lately for his support for an independent Consumer Financial Protection Agency and for generally backing greater reforms of the financial markets. In particular, Tester's been taking a lot of heat from a secretive, deep-pocketed organization called the Committee for Truth in Politics, which has targeted Tester and called the financial reform supported by the Montana senator a $4 trillion bank bailout in disguise. (That language, you'll remember, comes from a memo circulated by consultant Frank Luntz trying to torpedo Wall Street reforms.) Earlier this month, Tester called the committee's attacks on him "flat-out false," and asking to see the source of the committee's funding, which it doesn't publicize. "Our economy almost collapsed a year and a half ago because there were no referees on Wall Street," Tester wrote in a statement. "Montana's Main Street small business owners and families should never have to pay the price of greed on Wall Street."

Here's the ad:

8 Health Lobbyists Per Lawmaker

| Wed Feb. 24, 2010 6:05 PM EST

In 2009, the hordes of lobbyists on Capitol Hill trying to influence the course of health-care reform grew to more than 4,500, representing 1,750 different organizations and companies—from the AARP and US Chamber of Commerce to religious groups and the Business Roundtable, according to a new analysis by the Center for Public Integrity (CPI). Here's a better way of visualizing that lobbying total: For each member of Congress, there are now eight lobbyists involved in health-care reform, up from about six lobbyists per lawmaker as was reported last fall when talks had practically paralyzed Congress. 

As CPI's new data makes clear, just about everyone and their uncle has signed up to lobby on health-care negotiations, which are now entering their final act. Among the top groups deploying their influence-peddlers to Washington are advocacy organizations, like the Chamber and Business Roundtable, as well as hospitals, insurers, and manufacturing companies also sending numerous representatives to lobby House and Senate lawmakers. All told, CPI's new report just goes to show that when huge amounts of money are at stake, powerful special interests like the pharmaceutical and insurance industries are willing to bombarding politicians in order to ensure none of their profits slip away.

Below you'll find an interactive graph, courtesy of CPI, letting you dig into their data a bit more.

Obama: Markets No Better than Pre-Crisis

| Wed Feb. 24, 2010 3:49 PM EST

In a speech today to the powerful coalition the Business Roundtable, President Obama tried to rally some of the biggest players in the US economy around his plans to re-regulate the financial system—a system, he warned, "with the same vulnerabilities that it had before this crisis began." Obama was speaking to the Business Roundtable at their quarterly meeting in Washington, and set aside a few minutes in his speech—which ranged from job creation to international trade to health care—to emphasize the need for reining in Wall Street and preventing the kinds of reckless risk-taking and outright gambling that fueled the subprime meltdown and the Great Recession. "If we don't pass financial reform," he said, "we can expect more crises in the future of the sort that we just saw."

Here's more from his speech calling on the need for greater—and smarter—financial reform:

[A]s I said in the State of the Union, my goal is not to punish Wall Street. I believe that most individuals in the financial sector are looking to make money in an honest and transparent way. But if there aren't rules in place to guard against the recklessness of a few, and they're allowed to exploit consumers and take on excessive risk, it starts a race to the bottom that results in all of us losing.

And that's what we need to change. We can't repeat the mistakes of the past. We can't allow another AIG or another Lehman to happen again. We can't allow financial institutions, including those that take your deposits, to make gambles that threaten the whole economy. What does that mean? It means we've got to ensure consolidated supervision of all institutions that could pose a risk to the system. It means we have to close loopholes that allow financial firms to evade oversight and circumvent rules of the road. It means that we need more robust consumer and investor protections.

And I ask the Business Roundtable to support these efforts. There are lobbyists on the Hill right now trying to kill reform by claiming that it would undermine businesses outside of the financial sector. That is not true. This is about putting in place rules that encourage drive and innovation instead of shortcuts and abuse. And those are rules that will benefit everybody.

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