Patt Morrison for September 2, 2011

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Mortgage backed securities, the original boogeyman of the 2008 financial crisis that eventually led to one of the deepest recessions in history, continue to haunt banks, consumers and the government. This morning there’s word that the Federal Housing Finance Agency, which oversees the government’s two mortgage giants Fannie Mae and Freddie Mac, is preparing to sue over a dozen of the nation’s biggest banks over soured mortgage bonds in a bid to recoup billions of dollars in losses from failed investments. When this lawsuit is officially filed it will become a part of the broad legal front against banks like Bank of America, Wells Fargo, JP Morgan Chase and Deutsche Bank, among others that is seeking to make good on losses from mortgage backed securities that totaled hundreds of billions of dollars. All 50 state attorneys general are continuing to pursue a lawsuit, and potential settlement, against these same banks for fraudulent mortgage practices. In the case of the federal government, Fannie & Freddie invested in mortgage-backed securities based on subprime and other risky loans that were originated by mortgage companies—the end result was a bailout to the tune of $141 billion to keep Fannie & Freddie afloat after massive losses by those risky securities. What do the banks say? They claim if they are made to pay out billions in settlements, given their already wobbly financial status, they might need another bailout. Should the banks be made to pay for their sins of the recent past?
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President Obama announced today that he will overrule the Environmental Protection Agency’s (EPA) plan to immediately enforce stricter nationwide ozone emission standards in the interest of preserving the nation’s delicate economy. Reviled by industry representatives and called “the most harmful of all the currently anticipated Obama administration regulations” by Rep. Eric Cantor, the EPA’s proposed changes to air quality rules would have lowered the limit on smog-causing chemicals emissions to between 60 and 70 parts of ozone per billion. In the absence of this long-delayed legislation, business in the U.S. will go on as usual under a Bush-era standard of 75 parts of ozone per billion, which is in the violation of the Clean Air Act. The U.S. Chamber of Commerce and the heads of giant industries applauded the President’s decision, claiming that the new regulation would have cost the country billions of dollars and thousands of lost jobs. Unsurprisingly, environmentalists decried the announcement, calling it an enormous defeat for public health, even though air quality legislation will again be under consideration in 2013. According to EPA scientists, the current standard is dangerously high, and problematic in light of the health problems that extensive exposure to ozone can cause, such as chest pain, respiratory irritation and impaired lung function. The White House’s decision comes on the same day as the release of the Labor Department’s employment report, which found that the economy failed to add new jobs in the month of August. Was the move under consideration by the administration for some time, or is it a weak attempt to repair the government’s image in the wake of faltering job figures? Will President Obama further alienate his environmental base? And will the president be around to oversee the review of similar legislation in 2013 anyway?
Mercer 20777
It’s relatively easy to look around the world and see how the attacks of September 11, 2001 have changed various countries. Afghanistan has an ostensibly democratically-elected government but has also endured 10-years of guerrilla warfare and occupation by NATO forces; Iraq underwent a bloody invasion, a bloodier civil war and insurgency and now struggles with reduced violence but higher levels of uncertainty; Pakistan has become a very unstable and dangerous place. But take a look around here at home and it’s harder to define the “war on terrorism” era that dawned after 9/11. Preoccupation with terrorism and the possibility of new terror attacks on American soil has obviously been the most major consequence of 9/11. But, as our guest Brian Michael Jenkins writes, “terrorism also provided a lightening rod for America’s broader anxieties and it has held a mirror to many of America’s enduring characteristics.” The notion of the American rule of law has been repeatedly challenged in the way we have dealt with terrorism suspects, including American citizens. The right to privacy has been challenged in the way the government eavesdrops on huge volumes of electronic communications, in the name of monitoring future threats. American spirituality has undergone some tests, grappling with the sizable Muslim population in this country and arguments over Judeo-Christian ideals that govern the country’s laws. All of the post 9/11 challenges deal directly with the perseverance and interpretation of the American Constitution and how the document has changed since the war on terrorism began. Have we stayed true to American ideals in our new post-9/11 world?
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Tough times and tough questions face the Los Angeles Unified School District: slashed budgets have caused teacher and staff layoffs, increased class sizes, and cancellation of arts and career training courses; test scores are low and drop-out rates high; conflict over evaluations threatens the relationship between teachers and the district; and it’s a constant challenge to reach parents who want to be involved but struggle with busy schedules or language barriers. With nearly 700,000 K-12 students in the second largest school district in the nation, all parties involved are feeling the urgent need for reform, though new measures under Superintendent John Deasy’s purview have bolstered confidence in the district’s seriousness about change. Officials, teachers, parents and students will face these challenges head-on as kids file into the classroom for the new academic year. One issue likely to raises hackles and concerns on all sides will be the state of LAUSD’s delicate negotiations with UTLA over teacher contracts, evaluation, and rehiring. The statewide budget crisis led to sharp cuts in the beleaguered school district’s funding for next year, which in turn led to the layoffs of more than 3,000 teachers, furlough days and scrapped summer and extracurricular programs. Supt. Deasy has proposed a series of changes to existing employment contracts and is piloting a teacher evaluation program with more than 1,000 educators and 104 schools participating, in the hopes that its new procedures will yield more accurate indications of teaching quality and get the green light for implementation in the 2012-2013 school year. UTLA, which sought an injunction against the pilot program that fell through earlier this year, has yet to agree to the suggestions. Many of the teachers the union represents are especially opposed to the “value-added” evaluative approach, which incorporates student test scores into assessments of teacher quality. LAUSD and UTLA are also locked in a dispute over rehiring practices, which have been somewhat complicated by the mandates of a state bill called AB 114 and the expected loss of $100 million revenue that the district will sustain due to declining enrollment. Obstacles to parental involvement in the school system will probably remain a cause for dissension too. The challenge of dealing with a prodigious bureaucracy and of communication between teachers and parents for whom English is not a primary language has limited parents’ engagement in their kids’ education and put some minorities at a disadvantage, advocacy groups say. Many parents are also upset over the transient nature of the various reforms that the district has put into effect over the years, wondering whether any of those steps truly improved their children’s education. And LAUSD’s students themselves, who face over-crowded classrooms and limited educational resources on a daily basis, cite bad teaching, ineffective disciplinary procedure, and the infrequency of communication between school staff, parents and teachers as further barriers to effective learning. With all of these conflicting views about what to change and how to change it, agreement seems like a distant possibility. But despite the bleak situation, a few laudable improvements have brightened prospects for change in other sectors. The district has made some surprising gains in student achievement over the past year, with modest increases in standardized test scores and graduation rates that have left parents pleased and charter school reformists bewildered. Though LAUSD’s test scores still lag behind the statewide averages, a recent analysis conducted by the Los Angeles Times revealed that LAUSD schools’ results significantly superseded those of many underperforming schools that had been recently taken over by charter operations. Eight underperforming schools have been overhauled since Deasy became superintendent in April, while successful agreements with various employee unions over increased furlough days prevented about half of the layoffs expected for this year. The district has also revamped its school menu by banning sugary milk and introducing more vegetarian options in an effort to combat the nation-wide obesity epidemic, much to the approval of many parents and health organizations. Parents of LAUSD students scored a victory as well in the recent passage of the “parent trigger law,” which gives parents the power to petition for changes in staff and management at schools that consistently underperform. Since all of these changes taking place over the past year, could next year be packed with similar advances, or will district officials become mired in endless disagreement? With so many conflicting efforts for reform steep budget cuts in the mix, what does the future have in store for the nation’s second-largest school district? Which changes will be made first, and how will they satisfy those invested in Los Angeles’ public education system?
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