Mark Schmitt

Mark Schmitt is director of the program on political reform at the New America Foundation and former executive editor of The American Prospect

 

 

Recent Articles

It's Time to Rethink the Problem

Everything Americans thought they knew about risk was wrong. Now what? To restore real prosperity, we'll need to get smarter about what we don't know.

An AIG office building in New York. (AP Photo/Mark Lennihan)
If there's one thing the financial crisis has taught us, its' that we grossly misjudged the risk we were taking on. We offer five perspectives on rethinking risk -- on everything from finance to housing to social policy -- in the hopes of stopping the next major meltdown before it starts. Private Risk Is the Public's Business By David Moss Risk Is Best Managed From the Bottom Up By Nomi Prins The Rich and Powerful Can Avoid Risk By Robert A. Johnson Housing Is Local, and Lending Should Be, Too By Alyssa katz A Strong Safety Net Encourages Healthy Risk-Taking By Jacob S. Hacker *** How did it happen? How did the sub-prime mortgage crisis cascade into the Wall Street meltdown and then the worst recession since the 1930s? One answer crops up over and over: It was the math. According to Wired magazine, a single equation, the Gaussian Copula Function, brought down the financial system. Joseph Nocera of The New York Times attributes the Wall Street disaster to a mathematical system known as...

Missed Connections

Bush kept choices about taxes separate from questions of services. Progressives have turned the tables.

One of the tricks that conservatives used to maintain control during the Bush era was to always vote on tax cuts in isolation, keeping choices about taxes completely separate from questions of spending and government services. Otherwise people would realize that taxes actually paid for something and that cutting them had consequences. Even in the Reagan years, when taxes were raised seven times, government made decisions about spending and revenues together. But starting in 2001, the first choice was always about whether or not to cut taxes, and inevitable spending cuts were pushed off into the future. In 2005, the Republicans even separated the federal budget into two bills, an early one made up of tax cuts and, months later, a package of spending cuts, so that no one in the debate about the first could point out that it forced the second. The budget deficits of the Bush era were a product of this Ponzi scheme. Now, progressives have turned the tables. The economic crisis makes...

The Persuasion Broker

In a city littered with liberal dreams gone awry, one social entrepreneur has been getting it right for almost 50 years.

A few years ago, I quietly resolved that my goal in my life should be to be more like Herb Sturz. If that seems like an odd goal, then, like most people, you've probably never heard of Herb Sturz. I hadn't either, until I worked at the Open Society Institute, George Soros' foundation, where Sturz was on the board and from which he had created a vast program of after-school activities in New York City. Using Soros' money to attract matching funds from the city and state, he revived the once-forgotten idea that kids should have something constructive to do after 3 p.m. It took a while, and a few long lunches, before I came to understand that the after-school project was only the latest in a very long string of innovative, daring, and successful social projects, most in New York, that began in 1961 with an effort to reform the arbitrary, cruel system of bail for criminal defendants. Sturz is what is now called a "social entrepreneur," although I can't imagine him using that term to...

AIG'S ACTUAL CLAIM: CONNECTICUT MADE US DO IT.

I just read the white paper that AIG provided to back up its claim, in its letter to Secretary Geithner , that its hands were tied when it came to paying bonuses. I found it sort of amazing that the white paper didn't cite a single passage from any of the contracts to show that they couldn't be abrogated, or the consequences of non-payment. I would assume a multimillion dollar employment contract would have some language about the conditions for the bonuses, and how disputes over refusal to pay are settled. I'm not saying that the binding language isn't there in the contracts, just odd that they wouldn't quote or cite it if it was. Indeed, the only really specific legal claim, and the only case law cited in the white paper, was that non-payment might violate the Connecticut Wage Law. (That's the thing that's posted on the bulletin board in the AIG break room, I presume.) The white paper cites a case ( Schoonmaker v Brunoli ) in which carpenters weren't paid on a UConn construction...

THE PARTISAN CASE AGAINST EARMARKS.

Senator Lindsey Graham 's ability to attack earmarks in the very same breath that he declares "I should have the ability as a United States senator to direct money back to my state as long as it’s transparent and it makes sense" might indicate that he's a hypocrite, or perhaps not a native English speaker. The fact that Senator Jon Kyl and other Republicans have fallen into the same trap supports the first conclusion, since it's hard to imagine the Republicans sending that many non-English speakers to Congress. But watching Graham with David Gregory yesterday, I realized that eliminating earmarks might pose a real danger to him and his colleagues. As policy, I'm as indifferent to the issue of earmarks as Tom Mann . They're inconsequential. Not only do they represent less than one percent of the federal budget, eliminating them wouldn't even reduce federal spending by even that tiny amount, or any amount at all, since earmarks by definition simply tag the spending in an already...

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