Mike Konczal

The Boom Not The Slump: Commentary

We’ve had a lot of exciting feedback and commentary on our latest paper The Boom Not The Slump: The Right Time For Austerity, including discussion from Paul Krugman, Brad Delong, James Ledbetter at Slate, Richard Exell at Touchstone Blog, Gregory White at Business Insider and Karl Whelan at Irish Economy. Thanks to everyone for discussing it.

We’ve updated the paper to an August 23rd edition taking in some feedback and cleaning up some typos, a formatting error in Table 1, and references to the count of total examples in the text.

We look forward to sharing future working papers with you, including exciting upcoming new…

Mike Konczal Goes to Treasury

On Monday I took part in a blogger meeting with several members of the Treasury Department. Alex Tabarrok has a writeup, as does Yves Smith and John Lounsbury has an extensive one as well.

First off, here’s a picture of me with Robert Rubin’s portrait:

On Elizabeth Warren, Financial Literacy and Complexity

The GOP will have a hard time blasting someone who works for financial literacy and against complex products.

The recommendations for Warren keep coming in: The New York Times makes the best case on her credentials, but there are other cases to be made. Matt Yglesias writes that it would rally the base. Noam Scheiber does the math and finds Warren can likely be confirmed.

The Crisis in Deeply Underwater Mortgages, Unemployment Edition

How many communities will be hit by the downward spiral of underwater houses and unemployment?

First, make sure to check out the Negative Equity Breakdown by Calculated Risk Blog.

I got a hold of the negative equity data by state and decided to plot the percent of owner-occupied households that were more than 50% underwater — in other words, the incredibly deep underwater mortgages — against unemployment. Here is percent of mortgages underwater 50%+ underwater versus June 2010 U3 unemployment by state (click through for larger graph):

Now here’s the interesting part. I took the 1 year difference of U3 unemployment by state, so…

Chris Hayes, guest hosting the Rachel Maddow Show, covers the failure of HAMP.

Some truths about HAMP according to Mike Konczal.

Fantastic job and much appreciated thanks to Chris Hayes and the Rachel Maddow Show team for covering the failure of the HAMP program.

He opens with MSNBC news clips from 2007 talking about the foreclosure crisis that was coming, and notes how even though the crisis is far worse in 2010 the mainstream media coverage has more or less disappeared. I like his metaphors of the HAMP waterfall of interest adjustments, term modification and principal reduction for underwater people as the equivalent of scuba gear, a snorkel, and actually pulling someone up from being…

Megan McArdle’s Hack Post on Elizabeth Warren’s Scholarship

Defending the facts in Elizabeth Warren’s work.

So Megan McArdle wrote a long post attacking Elizabeth Warren as a scholar. What’s surprising is how little “there-there” there is to her critique. I would love to see nomination hearings based around how expansive of a definition to use for medical bankruptcies and watch Warren rip the face off of Senators when it comes to empirical methods. I doubt it is going to come to this, but I’ll go ahead and respond. (I’ve been waiting for part two to respond, which I assume may not show up.)

Because that isn’t what this is about. It’s…

How HAMP Makes Elizabeth Warren The Only Choice For Consumer Protection

No one else has been a stronger advocate for public disclosure.

There’s a debate going on about who should be nominated to run the Consumer Financial Protection Bureau at the Federal Reserve. One side says Elizabeth Warren, while another says someone from Treasury, likely Michael Barr.

At a quick glance you might not see a big difference. As Felix notes, Michael Barr is very strong on consumer finance.

But I think Warren would be a far superior choice. There are many reasons why, but I want to discuss a very specific one here that distinguishes her from anyone in Treasury. The biggest: she…

Treasury versus Progressives on the Financial Reform Bill

Treasury never stepped up to fight against the status quo on Wall Street.

Bob Kuttner wrote an essay about disappointment with Obama; Jon Cohn and Jonathan Chait responded. On a related note, people have asked me what I think about Senator Feingold deciding not to vote for the financial reform bill.

- For my overall impression of the bill, I want to echo points brought up by Roosevelt Institute Senior Fellow Rob Johnson here:

The financial reform legislation is both disappointing and inspiring. The legislation is the product of a broken government process where dollars overwhelm voters. Lobbying in the gazillions predictably stopped the needed major structural…

“I just want to say two words to you: Resource Extraction.”

From the slack wire:

Sign of the times

Interesting milestone in 2008, according to the BEA. For the first time ever (well, at least since 1947) manufacturing was no longer the largest recipient of US nonresidential investment. The new champ? Mining. $216 billion in new fixed assets in mining (mostly in oil and gas extraction), and only $208 billion in manufacturing.

I don’t remember seeing this written about anywhere, but it seems like it should mean something.

Underwater Mortgages and the Odd Definition of the Experian Study

Strategic default models expect people to eat cat food rather than walk away from their house.

From the Wall Street Journal: Study: Nearly One in Five Mortgage Defaults Are ‘Strategic.’ That’s a fairly high number! What do they mean by a strategic defaulter?

A new report estimates that nearly one in five mortgage defaults through the first half of 2009 were “strategic,” where borrowers who appeared to have the capacity to pay their mortgages stopped doing so.

The research follows on an earlier report by Experian and Oliver Wyman that first aimed to quantify the share of mortgage defaults that are “strategic.” Strategic defaulters…