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Journalistic Malpractice

| Sun Mar. 8, 2009 12:35 PM EDT
The Washington Post has a big front-page story today about a sudden spike in fraudulent FHA loan activity.  Here's the nut:

With the surge in new [FHA] loans, however, comes a new threat. Many borrowers are defaulting as quickly as they take out the loans....Many industry experts attribute the jump in these instant defaults to factors that include the weak economy, lax scrutiny of prospective borrowers and most notably, foul play among unscrupulous lenders looking to make a quick buck.

If a loan "is going into default immediately, it clearly suggests impropriety and fraudulent activity," said Kenneth Donohue, the inspector general of the Department of Housing and Urban Development, which includes the FHA.

....More than 9,200 of the loans insured by the FHA in the past two years have gone into default after no or only one payment, according to the Post analysis. The pace of these instant defaults has tripled in one year. By last fall, more than two dozen FHA home loans on average were defaulting this way every day, seven days a week.

So is fraudulent activity up?  That's hard to say because the Post story goes to considerable lengths to leave out the one obvious stat that would tell us: how many loans is the FHA insuring in the first place?  Here's the answer, according to figures compiled by MortgageDataWeb: there were roughly 500,000 FHA loans originated in 2007 compared to 1.4 million in 2008.

In other words, the number of FHA loans has tripled in one year.  And the number of instant defaults has tripled too.  The amount of fraudulent activity appears to have held pretty steady at about 0.5% of all FHA loans.

Now, there's nothing wrong with running this story anyway.  If FHA loans are up, it makes sense that oversight staff should be up too, and apparently it's not.  That's a problem, so good for the Post for bringing this up.

At the same time, the Post also tries very hard to make it sound like the increase in fraudulent activity is fundamentally due to a sudden onslaught of shifty mortgage brokers and lousy supervision from the government.  But that's almost certainly not really the case, something that would be immediately apparent if the Post included the one figure that practically screams its absence.  In fact, this statistic is such an obvious one to include that it's hard not to believe that it was included in early drafts of this piece and then removed in order to juice up their story.

That's journalistic malpractice.  Unless the Post reporters who wrote this piece are incompetent, leaving out this basic information was a deliberate effort to hype their reporting and mislead their readers.  That's no way to run a newspaper.

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Signs of the Econapocalypse, Part II: The Resurgence of Swing

| Sat Mar. 7, 2009 9:48 PM EST
Yesterday, Nicole McClelland pointed out that there appears to be a direct relationship between tie width and economic prosperity, as well as indications that both hemlines and lipstick sales rise when finances fall. It got me to thinking: what other cultural trends might correspond to recessions? Glancing around the iTunes Top 100, there's one recent pop music phenomenon that may be a candidate: the swing, or "shuffle" rhythm. Okay crazy, you're thinking, big band hasn't exactly taken over the pop charts. Indeed, but stay with me: I'm just talking about the meter. In swing rhythms, each beat is separated into triplets, rather than 8th or 16th notes. Most pop music falls into the latter category, but every once in a while you get a track with swing: Gary Glitter's "Rock and Roll Part 2," for instance. However, recently, there has been a barrage of straight up pop hits utilizing the swing rhythm: Katy Perry's "I Kissed a Girl," Britney Spears' "Womanizer," Pink's "So What," and the current #1 song in the U.S., Flo Rida's "Right Round," which manages to add a swing rhythm to the robotic Dead or Alive original. (Listen to these tracks below). This is in addition to alt-rock tracks by Seether and Panic at the Disco, and even a new strain of underground drum 'n' bass that uses swing time, something almost unheard of in electronic music.

Counterparty Risk

| Sat Mar. 7, 2009 7:30 PM EST
What's going on with AIG?  Just in the past few days the entire country has suddenly become outraged by the fact that much of the federal bailout money going to AIG is being used to pay off its creditors. Creditors, in this case, being people who bought insurance via credit default swaps and are now owed payment either for mortgage-backed securities that have gone bad or for increased collateral requirements caused by AIG's downgrade from AAA.  And some of these creditors are other banks!  And some of them are even foreign banks!!!

But look.  Last year "counterparty risk" was practically crowned the phrase of the year.  You couldn't swing a dead copy of the Wall Street Journal without coming across it.  It's the reason we're bailing out all these guys in the first place: if a big bank goes bust and stiffs all its creditors, then there's a chance that they'll go bust too, and before long you have a cascading series of failures that's brought down the entire world.  We tried letting Lehman Brothers — a relatively small bank in the grand scheme of things — go under, and all hell broke loose.  That's why the Fed stepped in a few days later to save AIG.

So why is everyone suddenly acting as if we just discovered yesterday that bailout money is being used to pay off AIG's counterparties?  And that this is some kind of scandal?  Help me out here.  I'm genuinely confused about why, after six months, this has suddenly become the populist outrage du jour.

Nonprofit Journalism

| Sat Mar. 7, 2009 2:26 PM EST
Newspapers have been dropping like flies recently, and because of that a lot of chatter in reporting circles these days revolves around the possibility that serious journalism in the future will mostly be done by nonprofits, funded by foundations and grants. Today the New York Times writes about a San Francisco-based magazine that's followed that model for over 30 years:

Mother Jones has become a real-life laboratory for whether nonprofit journalism — a topic of the moment in mainstream news media circles — can withstand a deep recession.

....Back in the fall, when the economic downturn intensified, and the plight of print publications became more dire, Mother Jones suffered, despite its position of not being in it for the money. Advertising plummeted, down 23 percent in 2008, and some of the big donations the magazine depends on didn’t come through.

Actually, things are better than that makes it sound.  Advertising is a pretty small chunk of our revenue, and overall fundraising has stayed pretty strong, all things considered:

[Jay] Harris, the magazine’s publisher, said the company met its fund-raising targets last year, although before the economic turmoil in the fall the magazine thought it would exceed goals.

But small-time donations and subscriptions have held steady at Mother Jones, to the surprise of its editors, who figured that the downturn would have taken more of a toll and that the election of Barack Obama would have a negative effect on raising money for liberal causes.

About half of the magazine’s yearly revenue is from major grants and donations. The magazine often seeks donations for specific projects, as it did in recent years to staff its Washington bureau at a time when many news organizations had been scaling back there. The bureau opened in late 2007 with eight people.

The Times failed to note MoJo's groundbreaking hiring of new blogging staff last year, but aside from that it's a decent piece about one possible future for investigative journalism.  Namely, us.  Check it out.

(And you should subscribe!  Only 15 bucks for the first year.  Just click here.)

Florists of Conscience

| Sat Mar. 7, 2009 1:19 PM EST
Via Andrew Sullivan, a Catholic conference on Friday came up with an anti-gay position that seems like something Saturday Night Live might have made up:

[Connecticut's] law does not require Catholic priests — or any other clergy member — to preside over same-sex weddings.

However, the church is seeking additional exemptions. For instance, it wants to ensure that a florist opposed to gay marriage on religious grounds not be forced to sell flowers to a same-sex couple.

I don't think a Catholic nurse should be required to assist at an abortion.  I don't think a Catholic charity should be required to provide benefits to same-sex couples.  But now they're suggesting, essentially, that anyone, anywhere, in any business, should be allowed to withhold their services from gay couples?  Give me a break.

Welcome, NY Times Readers!

| Sat Mar. 7, 2009 10:25 AM EST
Hey, great to see you here! Can we get you something to drink? Something to read about food? How about a quick tour of why MoJo went open source, or more about the two fabulous working moms who run this joint? Yeah, we thought you'd like that.

David Corn's on Twitter raising hell at White House press briefings. We're on Facebook; Kevin Drum, Debra Dickerson, and Julia Whitty are over here, here, and here.

Oh, we can't have you leave without a party favor or two. Free e-box brightener, anyone?

Anyway, welcome. Help yourself to as many National Magazine Award winning stories as you like–we've got lots. Like what you read? Tip your writers and tell your friends.

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Nalini Nadkarni Speaks for the Trees

| Fri Mar. 6, 2009 8:29 PM EST
It's not like people aren't way into trees; some embrace them, others even live in them. But arguably, neither the huggers nor the Dumpster Muffins of the world do as much for the trees as Evergreen State College ecologist Nalini Nadkarni, who has made a career of defending them. On today's TEDTalk, Nadkarni tells you stuff you probably didn't know about the tree canopy (there's a whole ecosystem up there) and explains why it deserves our attention. The president of the International Canopy Network, a nonprofit she founded in 1994, she's enlisted dancers, rappers, prisoners, and churchgoers to help her spread the tree gospel. Here's a sampling of her projects (H/T TED):

  • ICAN
    Nalini is president of the International Canopy Network, a non-profit built in 1994 to support interaction between all people with a vested interest in the state of the canopy. Clearly, scientists aren't alone in the desire to preserve our environment and this project connects them with educators, activists and more.
  • Biome
    After spending time exploring the treetops at Nalini's invitation in Costa Rica, choreographers for the innovative modern dance group Capacitor created a live show and video performance about their experience. Nalini was credited as Scientific Advisor.
  • Treetop Barbie
    Showing little girls that they can be scientists and canopy researchers too, Nalini and her graduate students collect secondhand Barbie dolls and outfit them for a day in the field before distributing them to eager young minds.

The Skinny Tie Is Officially Back!

| Fri Mar. 6, 2009 6:21 PM EST
Skinny Ties Yes! Thank you, econapocalypse! Photos used under a Creative Commons license from Flickr users endlessstudio, sheenabizarre, spunkinator, goldberg, and tantek.

GOP Gets LESS Tech-Savvy

| Fri Mar. 6, 2009 6:13 PM EST

The RNC's top in-house new media and tech guy, Cyrus Krohn, is resigning his post, setting the GOP even further back in its effort to match the Democrats' use of web tools to organize, raise funds, and message. (I've written about the GOP's tech deficit before.) I asked Matt Lewis, a conservative blogger, for his thoughts. They are below.

"I think Cyrus' departure is very bad news for the RNC. It is important for any organization to maintain institutional knowledge, and a lot of that knowledge just walked out the door.  This -- coupled with the fact that the RNC still has not filled key staff positions -- raises serious questions about the RNC's ability to fulfill basic logistical functions.

"Cyrus was a tech guy, which is important because it is easier to teach a tech guy politics than to take a political guy and make him technologically proficient. He was also highly regarded by the conservative blogosphere."

Michael Steele is off to a rocky start as the new head of the RNC. The one thing everyone seemed to agree he was doing right was his unreserved embrace of the web and conservative web activists. With Krohn's move, that too is in peril.

In Lifting Bush's Stem Cell Research Ban, Obama Removes a Bush Lie

| Fri Mar. 6, 2009 5:51 PM EST

One of the more infuriating prevarications of the presidency of George W. Bush concerned stem cell research.

On August 9, 2001, Bush delivered his first nationally televised prime-time address, and the subject was the federal funding of stem cell research. In the speech, he announced that he would allow federal funding of research involving stem cell lines that had already been created, but he said he would prohibit federal financing of research using new stem lines. His reasoning was that doing the latter would place the US government in the position of underwriting the destruction of blastocysts (a.k.a., very young embryos), and that would be morally wrong.

But have no fear, Bush said, this restriction would not get in the way of stem cell research, for there were already 60 existing stem lines. These lines, he said, "have the ability to regenerate themselves indefinitely, creating opportunities for research." Funding research that depended on those existing lines while saying nyet to research utilizing new lines, he maintained, "allows us to explore the promise and potential of stem cell research without crossing a fundamental moral line."

Bush was trying to have his cake and eat it, too. He was protecting blastocysts everywhere (and endearing himself to the Catholic Church and the anti-abortion movement), while maintaining that his administration would be supporting research that could find cures for all sorts of terrible diseases. Yet at the core of his argument was a serious misstatement of fact. There were not 60 lines available for vigorous research. By the estimates of expert scientists, between 10 and 30 lines existed, and not all of them were suitable for the best research. Many could not be regenerated indefinitely. And most were tainted by mouse DNA and not useful for the most advanced and promising sort of research related to finding cures and treatments for human diseases. The scientific community's consensus was unequivocal: The existing lines did not allow researchers to explore fully or effectively the promise and potential of stem cell research. Bush had greatly misled the public on this.

Why recall this now? Because of the news that President Obama will sign an executive order on Monday lifting Bush's restrictions on embryonic stem cell research. This will mark yet another move in the effort to undo the damage done by Bush's war on science.

For almost eight years, Bush's based-on-a-lie policy prevented research that could help scientists develop cures for serious diseases. There's probably no way to quantify the number of people who were negatively affected by this Bush decision--those who have suffered with Parkinson's, diabetes or other ailments--but there's no doubt that eight years is a long time when it comes to applying the brakes on promising research. On Monday, Obama will free federally-funded scientists from Bush's restrictions, and he will free the country from one of Bush's more consequential falsehoods.