College attendance rates for African-American and Latino students have been increasing steadily in recent years. But here's the bad news that comes along with that: those students are mostly attending non-selective four-year colleges and community colleges, while whites are increasingly attending prestigious colleges and universities, the Washington Post reports.
A study released Wednesday by the Georgetown University Center on Education and the Workforce found that between 1995 and 2009, college enrollment more than doubled for Latinos and jumped 73 percent for African Americans, while only increasing 15 percent for whites. During that period, 80 percent of white college freshman enrolled in the nation's top 468 colleges, while only 13 percent of Latinos and nine percent of African-Americans went to those selective four-year schools. More than two-thirds of African Americans and almost three-quarters of Hispanics went to non-selective schools. Look:
It's not because minority students are less qualified. Thirty percent of African-American and Hispanic students who had an A average in high school attend community colleges, compared with 22 percent of whites, according to the report, which says that unequal educational outcomes for minorities can be attributed to things like family income, and peer expectations, but also to simply not being white.
"The higher-education system is colorblind in theory but in fact operates, at least in part, as a systematic barrier to opportunity for many blacks and Hispanics, many of whom are college-qualified but tracked into overcrowded and under-funded colleges, where they are less likely to develop fully or to graduate," Anthony Carnevale, one of the report's authors, told the Post.
Here's how unequal college paths for whites and non-whites contributes to growing inequality in America, via the Post:
Students at the nation's top 468 colleges are the beneficiaries of much more spending—anywhere from two to five times as much as what is spent on instruction at community colleges or other schools without admissions requirements. And students at top schools are far more likely to graduate than students at other institutions, even when they are equally prepared, according to the report. In addition, graduates of top schools are far more likely than others to go on to graduate school.
The financial implications of those differences are huge: A worker with an advanced degree is expected to earn as much as $2.1 million more in his or her lifetime than a college dropout, the report said. Also, the report said graduates of selective colleges earn an average of $67,000 a year 10 years after graduation, about $18,000 a year more than their counterparts who graduate from non-selective schools.
The report's authors say that in order to combat growing racial polarization in higher education, more resources need to be directed to improve students' academic experiences at non-selective schools, which often struggle with over-crowded classrooms and outdated materials. The authors say that colleges and lawmakers should also do more to bring black and Hispanic students into top schools.
The report comes just as the Supreme Court recently dealt a blow to affirmative action. In June, the high court allowed affirmative action to survive, but made it harder to institute as part of the admissions process, ruling that schools must first prove there are "no workable race-neutral alternatives" to achieve diversity on campus.
Specifically, the Federal Energy Regulatory Commission (FERC) accused Chase traders in Houston of devising elaborate schemes that essentially forced electricity grid operators—organizations that manage the flow of electricity—in California and the Midwest to pay for plants to sit idle, causing them to pay more than 80 times the cost of prevailing electricity prices for ten months between 2010 and 2011. Chase's alleged price-gouging echoes the infamous 2001 Enron scheme, in which the company constricted electricity supply in California in order to jack up prices.
The FERC action comes at a time of increasing scrutiny of banks' ownership of commodities. Last week, for example, the New York Times questioned whether Goldman Sachs was manipulating the aluminum market through the metal warehouses it controls.
Even though the penalty for Chase's bad behavior is the largest the FERC has ever slapped on a company, the fine still falls in line with trifling punishments leveled against the bank—and other financial behemoths—for similar egregious behavior. Chase’s $410 million settlement, which was reached on Tuesday and will be divided between ratepayers and the Treasury Department, represents less than two percent of Chase’s record $21.3 billion 2012 profits—or about what it earns in a single week. (FERC has also barred the bank from trading in US energy securities for the next six months.)
Investigators for the agency initially considered holding one Chase executive and a few specific traders individually liable for the allegedly abusive pricing schemes, but ultimately dropped that idea, according to the Times. The bank has denied wrongdoing, and, as Reuters has pointed out, the settlement will put an end to a troublesome "distraction" for Chase CEO Jamie Dimon.
The bank has had other distractions in recent years. In May 2012, Chase lost $6 billion on risky trades out of its London office. So far, the banks has escaped penalty for those actions—US banking regulators merely ordered it to fix the risk-management failures that led to the massive loss.
Sen. Elizabeth Warren (D-Mass.) has repeatedly highlighted the discrepancy between the punishments meted out to ordinary Americans for criminal behavior and those big banks receive for wrongdoing—whether it be tricking consumers into paying higher power prices, causing massive trading losses, or laundering drug money: "If you're caught with an ounce of cocaine, you're going to go to jail," she said at a Senate Banking Committee hearing earlier this year, referring to the giant international bank HSBC. "But if you launder nearly a billion dollars for international cartels and violate sanctions you pay a fine and you go home and sleep in your own bed a night."
There is a broad consensus among liberal economists that President Barack Obama should most definitely not nominate Larry Summers as the new chairman of the Federal Reserve. Summers, the former Treasury Secretary under President Clinton and the former director of Obama's National Economic Council, lacks the central banking experience that the other top contender for the position boasts: Janet Yellen, the Fed's current vice chair, has worked at the Fed for nearly 20 years. The little Summers has said about monetary policy suggests that he may cut back on the stimulus measures that the Fed has deployed since the financial crisis, even though the economy is still struggling. (Oh yeah, and he has implied that women may be "innate[ly]" intellectually inferior.)
But Summers has other troubling attributes. In addition to setting monetary policy, the Fed has important duties as a financial industry watchdog, and financial reform advocates say that Summers' blatantly pro-Wall Street record would doom current efforts by regulators and Congress to reign in the industry.
Here are six reasons why a Larry Summers Fed chair would be dangerous for financial reform:
1. Summers blocked pre-crash regulation of Wall Street: In the 1990s, Brooksley Born, the former chair of the Commodity Futures Trading Commission (CFTC) under Clinton, noticed that the complex, opaque, and as-yet unregulated derivatives market was rapidly expanding, so she proposed bringing the multi-trillion dollar market under CFTC rules. (Derivatives are financial products whose value is derived from underlying numbers like interest rates or fuel prices.) Summers, who was then Deputy Treasury Secretary, didn't like that idea. He testified during a 1998 Senate hearing that derivatives regulation wasn't necessary because Wall Street could be trusted to police itself. His fierce resistance, along with that of then-Fed Chair Alan Greenspan and former Treasury Secretary Robert Rubin, foiled Born's plans. As New York Times reporter Timothy O'Brien said at the time, "They...shut her up and shut her down." Partly because of this lack of derivatives oversight, few people saw the 2007 derivatives market meltdown coming.
Thousands of fast-food workers in New York City, Chicago, St. Louis, Detroit, Milwaukee, Kansas City and Flint, Mich., will strike at joints like McDonald's and Wendy's, calling for a wage increase to $15 an hour and the right to join a union without retaliation. (Although all American workers are legally allowed to join unions, many who try to organize are fired or punished with reduced hours.)
This is part of an economy-wide problem; the bottom 20 percent of American workers—some 28 million employees—earn less than $9.89 an hour, or $20,570 a year for a full-time employee. Their income fell five percent between 2006 and 2012. Meanwhile, average pay for chief executives at the country's top corporations leaped 16 percent last year, averaging $15.1 million, the New York Times reports.
The Times has a great chart showing what low-wage America looks like. Here are the demographics of the 21 million workers who make between $7.25 and $10 an hour:
The mobilization of fast-food workers is a pretty new thing, because the industry has traditionally had high turnover. But the slow economic recovery, which has been characterized by growth in mostly low-wage service sector jobs, has resulted in a growing population of adult fast-food workers who can't find other work.
Fast-food workers can work in the industry for years without more than a dollar or two raise. In his story on the strikes at Salon Monday, Josh Eidelson points to a recent study by the National Employment Law Project that explains why: "Opportunities for advancement in the fast food industry are significantly limited compared to other industries," the report says. "[O]nly 2.2 percent of jobs in the fast food industry are managerial, professional, or technical occupations, compared with 31 percent of jobs in the overall US economy."
One of the Russian men, Aleksandr Kalinin, was also charged Thursday in a separate case with having gained access to Nasdaq servers for two years between 2007 and 2010. The indictment reveals that Kalinin, who also went by the names Grig and Tempo, had access to an unknown amount of information on a bunch of Nasdaq servers, where he was able to enter commands to steal, change, or delete data, and at certain points could even perform systems administrator functions. According to the Times, federal prosecutors, international banking regulators, the FBI, and the financial industry are all worried that next time this happens hackers could gain access to even more tightly secured trading platforms and disrupt the financial system.
From the Times:
While Mr. Kalinin never penetrated the main servers supporting Nasdaq’s trading operations—and appears to have caused limited damage at Nasdaq—the attack raised the prospect that hackers could be getting closer to the infrastructure that supports billions of dollars of trades each hour.
"As today's allegations make clear, cybercriminals are determined to prey not only on individual bank accounts, but on the financial system itself," Preet Bharara, the top federal prosecutor in Manhattan, said in announcing the case.
It is a pivotal moment, just a week after a report from the World Federation of Exchanges and an international group of regulators warned about the vulnerability of exchanges to cybercrime. The report said that hackers were shifting their focus away from stealing money and toward more "destabilizing aims."
In a survey conducted for the report, 89 percent of the world's exchanges said that hacking posed a "systemic risk" to global financial markets...
At a Senate hearing on cybersecurity on Thursday, a representative of several financial industry groups, Mark Clancy, said that "for the financial services industry, cyberthreats are a constant reality and a potential systemic risk to the industry."
The World Federation of Exchanges (WFE) report found that 53 percent of all stock exchanges had experienced a cyberattack in the past year.
My colleague Nick Baumann has reported on how mere programming glitches at the mid-sized financial firm Knight Capital a year ago caused losses at the firm of $10 million a minute, and set off turmoil in the stock market. But an intentional attack could have more drastic effects. Baumann pointed to a 2011 article by John Bates, a computer scientist who has designed software behind complicated trading algorithms. "Fears of algorithmic terrorism, where a well-funded criminal or terrorist organization could find a way to cause a major market crisis, are not unfounded," Bates wrote at the time. "This type of scenario could cause chaos for civilization."