The Ladder

Newsstand via Flickr.com/Irumhia

Way back in 2011, we conducted a survey of readers that told us a number of things: importantly, we learned that many of you look to us for timely news from the asset building field and that a regular round-up of articles would be a welcome addition to our other content. In keeping with the spirit of 2012 and resolutions and all that good stuff, the Asset Building Program is introducing a new weekly blog feature: a Friday news round-up. We hope this will help you (and us, for that matter) keep up with developments in the field, note-worthy news, and learn about partner organizations working around the U.S. on asset building, economic security, anti-poverty policy, and accessible financial services for low- and middle-income Americans. Topics will vary week-to-week (and depending on the news!) but we’ll aim to provide a diverse overview of the things we’re keeping an eye on that we think you’ll find interesting too.

Consumer Protection

In national news, Obama named Richard Cordray as director of the Consumer Financial Protection Bureau after most Senate Republicans filibustered his nomination. Asset Building Program Director, Reid Cramer, was quoted in Bloomberg News, noting that the CFPB “will now be able to shed any lingering timidity as a startup agency.” The move is certain to lead to a boom in litigation (American Banker, subscription required.) Reuters’ piece on the nomination characterized Obama as “defiant” and House Speaker John Boehner calling the President's action an "unprecedented power grab." James Warren at The Atlantic called the move “smart and necessary.” Andrew Sullivan writes that the nomination is highly strategic. Mr. Cordray wasted no time in outlining an aggressive agenda for the CFPB, including action on the non-bank side, during an event at Brookings. For our take, see our press release.

Economic Mobility

Economic mobility garnered increased attention during 2011, including from the President. Relatively limited data combined with disagreements over how to best measure economic mobility have led to an ongoing debate about the true dynamics of mobility in American society. Scott Winship took on Obama’s recent claims about downward shifts in upward mobility, while the New York Times used research from the Pew Economic Mobility Project, Brookings, and others to illustrate the limits to economic mobility in the U.S. versus demographically similar countries.

Unemployment

According to the latest Gallup poll data, unemployment in December 2011 held at 8.5% - roughly holding steady from November but down from the same time last year. The Friday morning Employment Situation Summary from the Bureau of Labor Statistics reported job gains in a variety of sectors. Disparities in the unemployment rate emerge, however, along racial, gender, and educational lines. BLS reported for December 2011 that white unemployment was at 7.5% while Black unemployment was at 15.8%. Earlier in the week, the Washington Post highlighted the differences in unemployment among college graduates with different majors. On a related note….

Education

A Colorlines piece noted that Black and Latino students are disproportionately represented at for-profit colleges, a research finding that sheds light on the racial dynamics of student loan debt and divergent unemployment rates of highly educated people of color (since students from for-profit colleges have higher unemployment than private not-for-profit and public institutions). Meanwhile, an editorial for the New York Times reminded readers of the importance of the Head Start, but encouraged reforms to strengthen the program. This week, the Asset Building Program and the Center for Social Development co-released the first in a series of new reports outlining the relationship between children's savings and college attendance and calling for action to help more children develop savings and attend college - read the press release here.

Homeownership

With the housing market still flailing in the wake of the 2008 crisis, experts continue to debate the best approaches to solving the problem. The Financial Times  highlights the release of a report from the Federal Reserve that details a number of possible solutions. Homeownership, however, continues to have its malcontents. As the Fiscal Times notes in a piece about the trend toward more renting, “In 2009, $230 billion in federal money was devoted to helping home owners through policies like the mortgage interest deduction and support for Fannie Mae and Freddie Mac—four times what was spent on improving rental affordability, according to the Congressional Budget Office.” This is a great example of how homeownership can be an asset building tool – and of how policies are designed in ways that don’t always meet the asset building needs of lower-income people (in this case, renters get the short end of the stick). Furthermore, homeownership continues to be something that depends on not only personal wealth but familial wealth. As this Reuters article details, parents are helping their adult children afford to buy homes with informal gifts and loans. This perk of intergenerational transfer of wealth puts families who haven’t had the chance to build these assets in the past – notably families of color who were excluded from homeownership in previous generations – at a notable and racially marked disadvantage.

International News

Across the pond, the BBC reports on problems with the private pension system in the UK, such as plans being closed to new entrants and a lack of automatic enrollment. (Check out our work on AutoSave, a U.S. based workplace savings pilot program for more about the importance of workplace savings and Michael Calabrese's proposal to expand workplace retirement savings.) Meanwhile, consumers in the U.S. aren’t the only ones who struggle with the conundrum that “rent-to-buy” products create. This article in the Telegraph explains how a lack of bank accounts and access to enough cash to make full purchases ends up costing Brits more in the long run when they turn to rent-to-buy products.

Recaps of 2011

Occupy Wall Street, a movement that erupted this past year in response to growing income and wealth inequality, has a summary of its accomplishments and challenges in 2011. For those unfamiliar with the movement’s goals and action steps, this is an interesting first-hand primer. Lastly, for those who could use a little humor about some of the more frustrating parts of last year, Dave Barry delivers his “Festival of Sleaze.”

If you made it through all that, but want something more digestable, follow us on Twitter where we post links on a regular basis.