Sometimes the Government Puts Money in Our Pockets

The most obvious way has been tax cuts. President Obamas 2009 stimulus billa topic Ive discussed at some lengthincluded $300 billion in tax cuts, mostly for the non-rich. The centerpiece was called Making Work Pay, which provided up to $800 a year for the bottom 95% of working families, and was later converted into a payroll tax credit worth up to $2,136 a year before it expired in 2012. Most stimulus tax cuts were refundable, which meant low-income workers who dont pay income taxesthe 47 percent that Mitt Romney was caught denigrating on videowould be eligible to benefit. When Obama famously told former House Majority Leader Eric Cantor elections have consequences, Eric, and I won, he was talking about refundable tax cuts for the poor, which House Republicans opposed but could not block.

This extra money for the poor and middle class doesnt show up in charts illustrating how the rich are vacuuming up all the recoverys income and wealth. Those charts and the pundits who love them also tend to ignore the impact of Obamas tax hikes on the rich, especially his repeal of the Bush tax cuts on income over $400,000. In his Times essay, titled America Out of Whack, Edsall speculates at length about the impossibility of redistributive taxation in modern Washington, somehow failing to mention that it just happened in a big way last year. As Zachary Goldfarb calculated for a Washington Post piece on inequality in July, repeal cost the average member of the top 0.1% income bracket nearly half a million dollars.

Obamacare is also financed by hefty new taxes on the rich, including a 3.8% hike on investment income and a 0.9% hike on earned income above $250,000. But its main push against inequality will be its health benefits for the uninsured and underinsured. Free birth control is just one example. Theres also free primary care and other preventive services. Families up to 138% of the poverty line are now eligible for Medicaid benefits in participating states. The law also eliminated the donut hole, reducing drug costs for seniors. None of this will show up in the inequality data, but it all helps make ordinary Americans less financially insecure. And so far, Obamacare insurance premiums have been significantly lower than expected, which means more money in ratepayer pockets. Jason Furman, chair of the Council of Economic Advisers, says the combination of Obamacare plus progressive tax changes has offset a decades worth of rising inequality.

There are many less memorable ways that public policy has tried to narrow the gap. For example, the stimulus, if youll pardon my obsession, also sent $250 checks to retirees and disabled veterans, increased Pell Grants for low-income students by more than $600, and expanded unemployment benefits by $25 a week. Oh, and the stimulusalong with the much-maligned Wall Street bailouts and the Federal Reserves aggressive monetary policieshelped prevent a depression, a very good thing for the poor and middle class as well as the wealthy and the Dow. The 10 million new jobs created in this recovery didnt all go to rich people.

The stimulus also financed energy-efficiency retrofits of more than 1 million low-income homes, which will save families money and power for decades to come. And beyond the stimulus, the Department of Energy estimates that the Obama administrations new energy-efficiency mandates for refrigerators, air conditioners and dozens of other appliances will save consumers $450 billion on their electric bills through 2030. The administrations strict fuel-efficiency standards for cars and light trucks are expected save drivers another $500 billion. Thats real money.

Even the federal response to the foreclosure crisis, widely perceived as an abysmal failure, has provided financial help to millions of Americans in need. The most important move, widely perceived as a gift to undeserving corporations, was the $400 billion government bailout of Fannie Mae and Freddie Mac, which kept mortgage credit flowing at a time when no one else would provide it, averted a dramatic increase in mortgage rates, and helped 26 million homeowners reduce their monthly payments by refinancing their mortgages by 2014. Federal programs like HARP (which helped 3 million of those homeowners refinance) and HAMP (which helped modify another 1.3 million loans) were slow and often inefficient, but low mortgage ratesmaintained by the Federal Reserves aggressive purchases of mortgage-backed securities as well as the government backstop for Fannie and Freddiemeant money in the bank for anyone with an adjustable-rate mortgage.

Reasonable people can disagree about whether government should be in the business of redistributionwhat Obama called spreading the wealth in his 2008 chat with Joe the Plumberbut we should recognize that it is. The inequality trends, as severe as they are, would be far more severe without government intervention. Yes, the average CEO earns almost as much in a day as the average worker earns in a year, but governmentthrough progressive taxation, the safety net, public education and other public services, and the policies of the last five yearshas been pushing back.

Is it pushing back hard enough? Well, reasonable people can disagree about that, too.

Top 10 teams escape ugly college football Saturday

There were some near Top 10 upsets this Saturday, which just goes to show that the College Football Playoff selection committee is going to have its work cut out for them once the time comes. Heres what we learned and what we will be talking about into next week. Mainly just how good the SEC West Division is.

1. Texas Aamp;Ms comeback

The Aggies came from behind to win their first true test of the season against Arkansas in Jerry World. Down 28-14 in the fourth quarter, Kenny Hill threw touchdown passes of 86 and 59 yards to force overtime. And in overtime, he found Malcome Kennedy for a 25-yard touchdown on the first play. Texas Aamp;M stopped the Razorbacks on a fourth-and-1 to ultimately win it.

The game looked like it was Arkansas to win several times. But it just goes to show that you cannot count Aamp;M out when Hill is the quarterback. He threw for 386 yards and four touchdowns with only one interception, and Edward Pope accounted for two of Aamp;M’s touchdowns and accumulated 151 yards receiving on only four catches.

This sets up a huge Top 15 matchup for the Aggies in Starkville against an undefeated Mississippi State team thats been resting all weekend after an emotional win over LSU last week.

Stressed Borrowers Rattle Resurgent Subprime Lending Industry

Signs that all is not well with subprime lending came to the fore on Sept. 2, when Conn’s, a retailer that lends to its customers, reported higher-than-expected defaults. “What we’re seeing is that once the customers become delinquent beyond a certain period of time,” Theodore M. Wright, chief executive of Conn’s, said in a conference call, “they simply are not able to resolve that delinquency in the way that we’ve expected.”

The jarring numbers helped wipe nearly a third off the value of Conn’s stock that day and prompted credit analysts to check their assumptions about the remarkable recovery in subprime lending over the last several years.

While the market for subprime mortgages is still moribund, a resurgence of subprime auto loans has taken place. Companies that make subprime loans to consumers — those with credit scores generally below 620 — to buy items like appliances, one of the riskiest types of lending, have also experienced something of a revival. This has created the impression that lending to less creditworthy borrowers can actually be a sustainable business.

The numbers are not small.

Your college cheat sheet

For many of us, college is a defining experience. It’s where we expand our thinking, make lifelong friends and learn how to live on our own.

It’s also where we get a leg up in launching our careers. College graduates have better access to full-time jobs, and the median annual earnings for full-time working adults ages 25-34 with a bachelors degree is $46,900, compared with $30,000 for those with a high school diploma.

No wonder undergrad enrollment at US universities is projected to swell from 17.7 million to 20.2 million by 2023.
But college doesn’t always work as well as it could. In this sputtering economy, a college degree doesn’t guarantee a job. Critics complain that lower-level courses encourage the regurgitation of facts over true learning. And many students graduate with piles of crushing debt.

So we set out to find smart ways to improve students’ higher-ed experience — to “hack” college, as tech-fluent types might say. We sought advice from admissions experts, young entrepreneurs, professors and institutions that are innovating how to measure academic achievement.

What we found was encouraging: exclusive scholarships and inexpensive credits; options beyond the four-year college treadmill such as apprenticeships and digital badging; even resources for planning classes more effectively and picking better roommates.

We also found new tools for choosing the right school, studying smarter and lowering the steep costs of a college education.

So here are 10 ideas for making college work more effectively for you. May we present the CNN 10: Hacking College.

Gordon College faculty dissent not new

Gordon Colleges president had faced faculty criticism over his leadership a year before he caused a firestorm this summer for supporting a religious exemption to workplace protections for gay and transgender workers.

In hindsight, professors say, many of their prior concerns foreshadowed the uproar that ensued in July after campus President D. Michael Lindsay and 13 other religious leaders signed a letter to President Obama calling for the exemption to the federal hiring rules.

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Auto insurance to get boost

Drivers may see more flexible premiums in future with reform

After rounds of reforms of auto insurance since 2002, Chinas drivers are still bearing heavy premium fees but a new reform that alleviates this is expected to start soon.

I have never had a traffic accident since 2012, so how can my premium fees be so much?

Lu Shuai, a driver with about four years of driving experience, complained. He spends around 7,000 yuan ($1,141) each year on auto insurance, which includes compulsory and vehice damage insurance, for his Audi A4L, and even with his record of having no traffic accidents, can only get minor discounts from insurers.

The premium fees are still too high, he said, and hes not the only driver in China who thinks so.

The most common question asked by our customers is Can I enjoy more discounts if I have had no traffic accidents in the previous year? Shuai Yong, founder and CEO of ichexian.com.cn, a website that offers services including the recommendation and comparison of various types of auto insurance for drivers.

Not fully competitive

Auto insurance in China consists of two parts – compulsory insurance, which has a set annual price of 950 yuan for family vehicles with less than six seats, and other types of insurance including vehicle damage insurance and third-party liability insurance, which are optional for drivers.

But the premium rate is set by the China Insurance Regulatory Commission (CIRC), not the insurers.

In 1995, China launched its insurance law, which required the insurance regulator to set up articles of assurance and premium rates.

Later in 2002, auto insurers were permitted to set premium rates by themselves in an attempt to reform the countrys auto insurance market.

However, auto insurers then suffered losses due to a price war among market players who competed to cut premium rates.

Some insurers, such as China United Property Insurance Company Ltd, started to suffer big losses in 2006, according to previous media reports.

To avoid the risk of more losses, the Insurance Association of China (IAC) set up three types of premium rates in 2006, with auto insurers only able to choose one type after being reviewed by the CIRC.

Due to this, smaller insurers cannot compete with the larger players as they are not able to offer a lower premium rate to attract policyholders.

Since the auto insurance market is not fully competitive, the insurers could not flexibly adjust premium rates to improve their profitability, said Shuai.

Meanwhile, drivers have a limited choice of auto insurers, as the types of insurance offered by them are almost the same, Lu said.

Diversified premium rates

The CIRC released draft guidelines about reforms of premium rates for auto insurance in August this year, the Southern Weekly reported earlier this month.

These reforms may be put into practice at the beginning of 2015, the 21st Century Business Journal reported on September 17.

The draft guideline puts forward a more flexible method of calculating premium rates based on diversified factors including the types of autos and driving habits of the drivers.

Analysts said a reform of the auto insurance is urgently needed with the fast-growing number of cars in China.

To set up a more fair and orderly market for policyholders, the premium rates will gradually be set by the insurers, Hao Yansu, head of the Insurance Institute with the Central University of Finance and Economics, told the Global Times Wednesday.

If drivers are very cautious and dont have any traffic accidents on their record in the previous year, their premium fees should be very low, Hao suggested as an example.

Previously, premium rates were always fixed in line with vehicular factors, such as the vehicle price, but in the future, factors regarding drivers, such as driving experience and driving distance, as well as gender, should also be considered, Shuai noted.

In the US for instance, premium fees for female drivers, who are supposed to be more cautious, are generally lower than for male drivers.

Hao noted that one of the key factors of the reform is to set up a database holding traffic accident records of drivers.

Comprehensive database

To set up a comprehensive database for the auto insurance sector, officials of CIRC encouraged more players such as Internet companies to build a network of databases, China Insurance News reported in August.

Shuais company launched its Internet of vehicles hardware product Carbox in July. Once installed on a vehicle, Carbox can assess the driving actions of the driver.

The company is negotiating with about 30 insurers on a plan that will give drivers discounts on insurance premiums according to how little traffic accidents a driver has, said Shuai.

Carbox could also check the vehicle condition, carry out onboard diagnostics and suggest fuel-effective driving paths.

Carbox has around 500,000 users since it was launched, said Shuai.

Shuai believes Carbox will be very helpful in collecting data from drivers to promote reforms in auto insurance.

In May, Tencent Holding Ltd, Chinas leading Internet company, also released its first Internet of vehicles hardware product Lubao box, which has similar functions as Carbox, such as examining the vehicle condition and suggesting fuel-effective routes.

Breaking dealers monopoly

In addition to data collection, analysts said breaking a monopoly by the auto sector is also a necessary step.

Currently in China, auto parts are very expensive, which leads to high costs for auto insurers.

According to a research report released in April this year by IAC and China Automotive Maintenance and Repair Trade Association, the total price of the auto parts of a car is as high as 12.73 times the sales price of the car.

The central government recently intensified efforts in enforcing the antitrust law in the auto industry; a move Hao said will be helpful in reforming auto insurance.

In addition to monopoly, one-stop services offered by third-party insurance dealers such as 4S (sale, spare parts, service, survey) stores is another obstacle.

Normally, 4S stores help drivers buy auto insurance when they buy cars, and also repair their cars.

Since the premium fees of different major insurers are almost the same, I always authorize the 4S stores to buy insurance, Lu said.

But in the future, more insurers might cooperate with third-party international auto repair companies, which would enable drivers to have more choices when they repair their autos, rather than just the 4S stores, Shuai suggested.

What happened Saturday, Sept. 27, in college football: Final scores and 3 big …

Hoke had to know Morris couldnt play anymore and didnt belong in the game. Everyone in the stadium knew it. Fans rained boos down when Morris was kept in the game and cheered when he was let onto the sidelines (and not entirely because they were thrilled to see Gardner), then reacted with visceral outrage when Morris was allowed back in. Its shocking to hear.

And just to reiterate, this all happened while Michigan — the Michigan — was getting dump-trucked on its home field by Minnesota to fall to 2-3 on the season. Its the first time Michigan has ever lost three games in September. Michigans been playing football since 1879.

The wheels are off. The cars in the ditch, upside down and leaking gas everywhere. And Hoke sits in the drivers seat, adjusting the rearview mirror and trying to light a cigarette.

2. No, seriously, the SEC is really, really unbalanced.
by Peter Berkes

Tom Pennington, Getty

The SEC is often discussed as if its a monolith, as if all 14 of its members form one creature, hellbent on college football domination.

This is simplistic nonsense. The SEC West has already been the stronger of the two divisions for half a decade, but the difference between the West and the SEC East could not possibly be more stark.

Every team in the SEC West is good. The division is a collective 25-0 against non-SEC West teams. Alabama and Auburn both look like national title contenders. Texas AM hasn’t missed a beat without Johnny Manziel. LSU looks like its taken a step back, but is still capable of anything. Arkansas has taken a huge leap forward in year two of the Bret Bielema regime. Mississippi State and Ole Miss look lively. No team looks totally dominant, but every team is good.

Arkansas is the real wildcard in all of this. The Hogs were absolute dreck in 2013, but have stepped back into the light. They took Texas AM to overtime on Saturday, which is the same team that handed a 52-28 beatdown to South Carolina, the presumptive SEC East favorites, back in Week 1. With the Hogs looking like a real team again, there are no pushovers in the division. That is crazy.

The SEC East, meanwhile, is an unmitigated disaster. It’s not even October, and every team in the division sports at least one conference loss, except for Missouri, which somehow lost to Indiana. South Carolina, the team many fancied as a Playoff contender, has already lost two division games. It holds the tiebreaker over Georgia, the one that most closely resembles a competent football team.

To top it all off, Florida is still a thing that exists, and if youre its owner, please come take it home. Its leaving a dreadful mess all over the new carpet.

At the end of the year, the SEC East winner will have the privilege of getting keelhauled by the SEC West winner in the Georgia Dome. Thats been the case for most of the past five years, but it’s never felt like more of a foregone conclusion than right now.

3. Florida State is beatable. Now who can do it?
by Pete Volk

Grant Halverson, Getty

Three games against FBS opponents, three close calls for the defending national champs. No. 1 Florida States first two tight victories came against legitimate conference contenders — Oklahoma State and Clemson — and unless NC State is massively improved from 2013, that doesnt apply here.

A 15-point win might not sound like a near-loss, but FSU trailed by 17 points at one point and by 10 points in the second half, with a fired-up Raleigh crowd backing the potential upset.

NC State exploited one particular weakness. Without defensive tackle Nile Lawrence-Stample (out for the year with a torn pectoral) and defensive end Mario Edwards, Jr. (concussion), Florida State struggled on the line, particularly when defending runs up the middle. Shadrach Thornton ran for 85 yards on 18 carries with two touchdowns, and Florida transfer quarterback Jacoby Brissett (397 total yards) was able to escape from the pocket on numerous occasions and make plays …

… plays like this, which we probably cant blame entirely on the defensive line:

Via ABC

There was still a lot to like from the Seminoles performance. Thats because theyre still a very good football team. Jameis Winston had a fine game (even with two interceptions), and the Karlos Williams/Dalvin Cook tandem averaged 6.3 yards per carry.

But this isnt the first time weve seen a concerning game from these defending national champions, and with a few tougher opponents ahead, it might not be the last. If the Seminoles are going to survive their three-game slate against Notre Dame, Louisville, and Virginia (yes, Virginia), theyll have to step their game up.

Final scores

No. 1 Florida State 56, NC State 41 (recap)

No. 5 Auburn 45, Louisiana Tech 17 (recap)

No. 6 Texas AM 35, Arkansas 28 (OT) (recap)

No. 7 Baylor 49, Iowa State 28 (recap)

No. 8 Notre Dame 31, Syracuse 15 (recap)

No. 9 Michigan State 56, Wyoming 14 (recap)

No. 10 Ole Miss 24, Memphis 3 (recap)

No. 12 Georgia 35, Tennessee 32 (recap)

Missouri 21, No. 13 South Carolina 20 (recap)

No. 16 Stanford 20, Washington 13 (recap)

No. 17 LSU 63, New Mexico State 7

No. 18 USC 35, Oregon State 10 (recap)

No. 19 Wisconsin 27, South Florida 10 (recap)

No. 21 Nebraska 45, Illinois 14 (reaction)

No. 22 Ohio State 50, Cincinnati 28 (recap)

No. 25 Kansas State 58, UTEP 28 (recap)

Air Force 28, Boise State 14 (recap)

Akron 21, Pittsburgh 10 (recap)

Bowling Green 47, UMass 42 (recap)

Buffalo 35, Miami (Ohio) 27 (recap)

California 59, Colorado 56 (2OT) (WOW)

Clemson 50, North Carolina 35 (quick thoughts)

Colorado State 24, Boston College 21 (recap)

Florida Atlantic 41, UTSA 37 (recap)

Florida International 34, UAB 20 (recap)

Iowa 24, Purdue 10 (recap)

Kentucky 17, Vanderbilt 7 (recap)

Louisiana-Monroe 22, Troy 20

Louisville 20, Wake Forest 10 (tweetcap)

Maryland 37, Indiana 15 (reaction)

Miami  22, Duke 10 (recap)

Minnesota 30, Michigan 14 (recap)

Nevada 21, San Jose State 10

Northwestern 29, Penn State 6 (recap)

Ohio 34, Eastern Illinois 19 (recap)

Rice 41, Southern Miss 23

Rutgers 31, Tulane 6 (recap)

San Diego State 34, UNLV 17 (recap)

South Alabama 34, Idaho 10

TCU 56, SMU 0 (recap)

Temple 36, Connecticut 10 (recap)

Texas 23, Kansas 0 (recap)

Texas State 37, Tulsa 34 (3OT) (recap)

Toledo 42, Central Michigan 28 (recap)

Virginia 45, Kent State 13 (recap)

Virginia Tech 35, Western Michigan 17 (recap)

Washington State 28, Utah 27 (recap)

Western Kentucky 36, Navy 27 (recap)

Yale 49, Army 43 (OT) (recap)

Power ranking every college football conference heading into Week 5

SB Nation College News | September 24, 2014
Power ranking every college football conference heading into Week 5

Arkansans Trim Mortgage, Credit Card Debt, Add More Auto Loans

Following the national trend, Arkansans lowered their mortgage and credit card debts while auto loans continued to rise in the second quarter, according to the Federal Reserve Bank of St. Louis Burgundy Book.

In Arkansas, per capita debt balances were down 1.9 percent in mortgages and 3.5 percent in credit card debt, but were up 7 percent in auto loans. The national also saw a decrease in per-capita debt balances in mortgages (1.8 percent) and credit cards (4.6 percent), while auto loan debt increased 5.5 percent.

Across Arkansas and the US, 90-plus day delinquency rates were up, but at a slower pace than the first quarter.

Mortgage debt was up 1.9 percent, credit card debt was up 7.1 percent and auto loan debt was up 2.3 percent in Arkansas. Across the country, mortgage debt was up 3 percent, credit card debt was up 7.5 percent and auto loan debt was up 3.1 percent.

The report found the growth auto and student loan debts has nearly offset the reduction of other debts accrued since the Great Recession.

Relative to the second quarter of 2009, households increased their holdings of auto debt by $799 and student debt by $1,430, the report said. Over the same time span, the net change in household debt per capita was a reduction of $5.