Robert Kuttner

Robert Kuttner is co-founder and co-editor of The American Prospect, a professor at Brandeis University's Heller School, and a distinguished senior fellow of the think tank Demos. He was a longtime columnist for Business Week and continues to write columns in The Boston Globe. He is the author of Obama's Challenge and other books.

Recent Articles

The Mortgage Mess and Jack Lew

Rex Features via AP Images
The more information we learn about the mortgage settlement that was announced Monday—official documents are yet to be made public—the more of a smarmy backroom deal it turns out to be. The deal lets ten major banks and other “loan servicers” off the hook for a corrupted and illegal process of millions of foreclosures, with a paltry one-time settlement of $8.5 billion. The economic damage inflicted on homeowners, and by extension on the economy, was many times that. The deal was hatched by the weakest of the federal bank regulatory agencies, the Comptroller of the Currency, and signed off on by the Federal Reserve. There was no consultation with the more consumer-oriented agencies, such as the FDIC or the Consumer Finance Protection Bureau. The Comptroller just went and did it. Nor was the Justice Department consulted, even though the deal, nominally a civil settlement, will make criminal prosecutions more difficult now that a major regulator has signed off on an bargain to close the...

Is Jack Lew the Best We Can Do?

AP Photo/Charles Dharapak
AP Photo/Charles Dharapak White House Chief of Staff Jack Lew in the East Room of the White House in Washington T o no one’s great surprise, President Obama has appointed his chief of staff, Jack Lew, to succeed Tim Geithner as Treasury Secretary. Mainly, the choice signals that there will be no change either in the Obama-Geithner approach to reforming Wall Street (not very much), or on fiscal politics, where deficit reduction is a paramount goal despite a faltering recovery. The positives of Lew are these. He’s not a hard-core deficit hawk like Erskine Bowles (low bar). He’s not a bully like Larry Summers or Rahm Emanuel (even lower bar.) He’s a highly competent, detail-oriented numbers guy, and a skilled negotiator. That combination seems to drive some Republicans nuts, because in the infighting over the budget deal of 2011, Lew’s knowledge of the details enabled him to win some tactical victories in what was otherwise a rout for the administration (this was the deal that created...

The Banks Win Again

AP Photo/Mike Groll, File
Last February, the big banks agreed to a major “settlement” to protect themselves from litigation by state attorneys general stemming from fraudulent documentation of mortgages. Though some, such as New York’s crusading attorney general Eric Schneiderman, believed that the government had leverage to get a lot more, the settlement required the banks to pony up some $25 billion to settle outstanding charges. The banks, without admitting wrongdoing, agreed to reform fraudulent practices, such as “robo-signing” and proceeding with foreclosures on one track while supposedly helping borrowers to adjust terms on another. The settlement reserved the government’s right to continue criminal prosecutions. But there was a lot of double counting of funds already committed, and at the end of the day the banks parted with only a few billion dollars in new money, precious little of which went to relief of damaged mortgage holders. Only about $2.5 billion has found its way to actual principal...

Calling McConnell’s Bluff

Flickr/Gage Skidmore
The budget deal that just averted the supposed fiscal cliff was only a warm up. The next fiscal cliff is the $110 billion in automatic budget cuts (sequesters) that last week’s budget deal deferred only until March. But, as long as we are using topographic metaphors, this is less a cliff than a bluff. On the Sunday talk shows, Republican leaders were full of bravado and swagger. Representative Matt Salmon of Arizona, on CBS “Face the Nation” said it was about time “for another government shutdown.” Senate Minority Leader Mitch McConnell, speaking with ABC’s George Stephanopoulos, ruled out any further tax increases, declaring that “the tax issue is finished, over, completed.” He insisted, “Now it’s time to pivot and turn to the real issue, which is our spending addiction.” But is spending really the problem? For most the postwar era, federal tax revenues hovered around 19 percent of GDP, and spending a bit more than that. But for the four years since the financial collapse, federal...

The Austerity Lobby Loses One

Flickr/Michael Pollack
Flickr/Michael Pollack A conference sponsored by Fix the Debt in Washington, D.C. takes place in January 2012. T he fiscal deal that raised taxes on the top one percent was a victory only for what it did not do. It did not cut Social Security, Medicare, Medicaid, or other public spending. Unfortunately, it merely put off the next round of jousting over fiscal issues to a time when Republicans will have more leverage. In what we might call Cliff One (tax increases for the rich), the status quo played to President Obama’s advantage. If Congress failed to act, taxes would go up on everyone. So the Republicans caved. But in the coming battles over Cliff Two (the debt ceiling) and Cliff Three (the $120 billion in automatic cuts known as the Sequester) the status quo favors the Republicans. If Congress fails to act affirmatively, the United States defaults on its debt, and highly deflationary spending cuts kick in automatically. President Obama might dispatch Cliff Two by invoking the...

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