Tag Archives: housing

Are We Really in a Housing Bubble?

Mother Jones

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Are we in yet another housing bubble? The Case-Shiller chart I posted yesterday suggests we probably are: housing prices may not be at their previous 2006 peak, but they’re nonetheless far higher than their historical average.

But wait. What about interest rates? Low interest rates mean lower monthly payments, and that’s what really matters, not absolute prices. This is true enough, but how low are real mortgage rates? That is, mortgage rates adjusted for inflation. This low:

Historically, the average real 30-year fixed mortgage rate is a hair above 4 percent. Right now it’s at 3.5 percent. In other words, mortgage rates aren’t really all that low. This suggest that historically high home prices also mean historically high mortgage payments.

But there are other ways of looking at this. For example, total mortgage debt as a percent of GDP has retreated to 2002 levels and isn’t rising. Mortgage debt service as a percent of household income is low and declining. Both of these are good signs.

On the other hand, these are aggregate numbers that include everyone with a mortgage. It would be better if we could see them just for new buyers, but I don’t know where to find that. And if you look at the price-to-rent ratio, which is usually a good harbinger of housing bubbles, it’s been rising since 2012 and is now at 2004 levels. That’s not so good, and if we get to 2005 levels we should start being scared.

As usual, there are a lot of ways of looking at this, which is why different people will give you firm but very different opinions about home prices. Personally, I think the evidence suggests we’re in another bubble. But I might be wrong.

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Are We Really in a Housing Bubble?

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A West Virginia Miracle? I’m Not Feeling It.

Mother Jones

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Tyler Cowen shocks us all today by suggesting that West Virginia has been the site of a productivity miracle lately. He admits he’s mainly trying to provoke us, since West Virginia is unquestionably one of the poorest states in the nation. But it made me curious. How much has the West Virginia economy grown compared to neighboring states and to the US as a whole? I chose Maryland since it’s next door and no one considers it especially poor. Here’s what things look like:

In terms of growth, West Virginia has done OK since the start of the century. It was affected less by the Great Recession than the US as a whole—no surprise since West Virginia didn’t suffer from the housing boom and bust—but its growth rate since then has been a little below average. Ditto for median household income, which has been flat since the end of the recession.

As for cost of living, this site says West Virginia is 3 percent lower than the US. It’s a little cheaper on average to live in West Virginia compared to the rest of the country, but not by enough to matter.

So the bottom line is that West Virginia is poor; its growth rate since 2000 is above average thanks to insulation from the housing bust but below average since the end of the recession; and its cost of living is about average. That’s not terrible, but I guess I’m not feeling the miracle.


A West Virginia Miracle? I’m Not Feeling It.

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How a Private Prison Company Used Detained Immigrants for Free Labor

Mother Jones

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When Carlos Eliezer Ortiz Muñoz arrived at the Denver Contract Detention Facility in Aurora, Colorado, in 2014, he was given a clothing package and assigned to a housing unit, where he’d have to stay for months. Like tens of thousands of other immigrants across the country who are kept in Immigration and Customs Enforcement (ICE) detention each night, Ortiz and his fellow detainees were waiting to see if they’d win their immigration cases or face deportation.

Before long, the private prison company that ran the detention center put Ortiz to work. Each day in his housing unit, guards assigned a crew of six detainees to clean the private and common living areas; scrub down toilets, showers, and eating tables; and sweep and mop floors. “None of us got paid anything,” Ortiz said in a court statement. But he couldn’t protest—he knew he could be sent to solitary confinement if he refused to do the cleaning. “Some of the guards would threaten us by saying, ‘¿Quieres ir al hoyo?‘” Ortiz said. “‘You want to go to the hole?'”

The GEO Group, the private prison company that operates Aurora, allegedly forced more than 50,000 immigrants like Ortiz to work without pay or for $1 a day since 2004, according to a lawsuit that nine detainees brought against the company in 2014. On February 27, a federal judge ruled that their case could proceed as a class action, breathing new life into a suit that exposes the extent to which the for-profit company relied on cheap or unpaid detainee labor to minimize costs at the Aurora facility.

“If we’re right, and these practices are illegal, it has tremendous implications on the ability of the government to use detention in the immigration enforcement architecture,” says Andrew Free, an immigration attorney on the detainees’ legal team. “It would prompt a serious rethinking of whom to detain, and how much it’s going to cost.”

GEO incarcerates more immigrants (and receives more public money to do so) than any other detention center operator, according to an analysis by the anti-detention group CIVIC. And its business detaining immigrants for ICE is only expected to grow “with this increased and expanded approach to border security,” CEO George Zoley said in a February earnings call.

According to the lawsuit, there were two ways GEO cashed in on cheap labor from detainees. There was the facility’s sanitation policy, under which detainees like Ortiz were required to work as janitors without pay. If they didn’t, they risked being punished with solitary confinement, according to GEO’s local detainee handbook. Detainees could also apply for a job in Aurora’s voluntary work program, which paid them exactly $1 a day to keep the facility running.

In a statement, GEO spokesman Pablo Paez wrote that GEO’s volunteer work program policies follow federal standards. “We have consistently, strongly refuted the allegations made in this lawsuit, and we intend to continue to vigorously defend our company against these claims,” he said. “The volunteer work program at all immigration facilities as well as the minimum wage rates and standards associated with the program are set by the Federal government under mandated performance-based national detention standards.”

ICE’s standards for immigration detention centers say that voluntary work programs are intended to give detainees “opportunities to work and earn money while confined.” Yet David Fathi, director of the ACLU’s National Prison Project, says it’s questionable whether such programs are truly voluntary for people “held in captivity, against their will.” While working may be a positive outlet for incarcerated people, Fathi says, “the problem isn’t the existence of the work program. The problem is this inherently coercive relationship that makes the workers uniquely vulnerable to exploitation and abuse.”

Some people in Aurora’s program stripped and waxed floors, while others did laundry, prepared food, cut hair, or worked in the library. Shifts lasted between three and eight hours, according to a copy of Aurora’s detainee work program policy, and detainees were paid the same $1 no matter how long they were assigned to work.

Lourdes Argueta volunteered. She was given a job as a janitor in the medical unit, where she and other detainees “clean toilets, sweep and mop floors, pull carpets and clean floors, clean windows, remove trash, clean patients’ rooms (including cleaning up blood, feces and urine), and perform other cleaning tasks,” she said in a statement to the court. She also worked in GEO’s booking area, creating new detainee files and putting together packages of clothing for new detainees.

During a deposition, GEO’s assistant business manager at Aurora testified that if there were no “voluntary workers” like Argueta, the company would need to bring in additional officers, paid at hourly wages set by rules in GEO’s contract, to get the same work done. So how much would the company have to shell out if it didn’t rely on cheap detainee labor? Under GEO’s contract with ICE, which incorporated federal wage regulations, the lowest allowable employee wage at the Aurora facility was $10.90 an hour for food service workers. A typical shift in the voluntary work program lasted approximately seven hours, according to the detainee work program policy—so if GEO had hired additional employees to do the work, it would have cost the company nearly $76.30 per shift. (That’s a lowball estimate, given that some detainees worked jobs that would have paid significantly more.) Instead, they spent $1.

That translates to huge cost savings. Take, for example, November 2012, when detainees took hundreds of voluntary work program shifts. If GEO had hired employees to do those jobs instead, the company would have spent more than $125,000 in wages and benefits that month. GEO’s actual payments: $1,680.

That number only increases if you account for Aurora’s sanitation policy, under which all detainees in the facility did janitorial work in the housing units for no pay, the lawsuit alleges. GEO employees doing the same work would have been eligible for $12.01 per hour in wages, under the company’s contract with ICE.

“If GEO was absorbing all of the labor costs, its profit would be less,” explains Nina DiSalvo, executive director of Towards Justice, one of the firms representing the detainees. Andrew Free, the attorney, goes further: “It turns their profits upside down,” he claims. “It would be a money-losing enterprise if they had to pay the people to operate this facility under the current contract.” (Given that the Department of Homeland Security pays an average of $126.46 per day to detain one immigrant, that may not be a stretch.)

So how does the company get away with it? The “dollar a day” policy dates back to 1978, when Congress passed an appropriations bill funding voluntary detainee work programs, says Jacqueline Stevens, the head of Northwestern University’s Deportation Research Clinic, whose research on detainee labor informed the 2014 suit. But that was before the rise of private prison companies, she adds—and it was initially implemented in government-run facilities, not those run by for-profit companies beholden to shareholders. “GEO’s privately held, so there’s an extra concern that they may be exploiting people in a way an institution run by federal government would not be,” Stevens explains.

When immigrants inside Aurora filed grievances asking why they weren’t paid more, GEO’s assistant business manager replied by saying that ICE, not the company, set the daily rate. But in February’s order, Colorado District Court Judge John Kane ruled that while ICE only reimburses GEO for $1 per detainee shift, the company could pay more if it wanted. (And in fact, in at least one other location, it appears to have paid detainees more than the $1 ICE reimbursed it for, Stevens says.) While the detainees aren’t eligible for employment under GEO’s contract, their lawsuit argues that GEO “unjustly enriched” itself by misleading them about how much it could pay.

“By far the greatest expense of running any detention facility is labor,” Fathi says. “GEO has got to be worried that if this practice is unlawful at one facility, it’s presumptively unlawful at all facilities.” If they lose, he adds, “they have to be looking at not just what they would have to pay at Aurora.”

The lawsuit also argues that the sanitation policy violated the Trafficking Victims Protection Act, a modern anti-slavery statute. To maintain cleanliness in the housing units, GEO used housekeeping crews like the one Ortiz was assigned to when he arrived at Aurora. According to GEO’s local detainee handbook, refusing to clean was considered a “high moderate”-level offense and was punishable by several possible sanctions, including up to three days of so-called “disciplinary segregation”: solitary confinement. Plaintiff Demetrio Valerga told the court in a statement that he “did the work anyway because it was well known that those who refused to do that work for free were put in ‘the hole.'” With the sanitation policy in place, the company employed just one janitor for the 1,500-bed facility.

ICE’s own standards say detainees can’t be required to work, except for keeping “immediate living areas” neat: making their beds, stacking loose papers, and keeping the floor and furniture uncluttered. Under questioning during a deposition, Aurora’s assistant warden of operations made it clear that GEO considered all parts of the housing unit (bathrooms and day areas, as well as cells) to be fair game. Yet a federal watchdog agency recently found that requiring detained immigrants to clean any common areas used by all detainees was a violation of ICE standards.

“Imagine you see people being yelled at by guards and thrown in solitary all the time,” Free says. “In order to avoid solitary yourself, you have to maintain the sanitary nature of the facility you’re being housed in. And then they say, ‘If you want, we’ll pay you a dollar a day to do something else. If you don’t, you’re still going to work when we tell you to.’ And the company that’s on the other end of this is making millions.”

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How a Private Prison Company Used Detained Immigrants for Free Labor

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Buying a Home Is Nearly Impossible for Teachers in These Cities

Mother Jones

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Lauren Paquette dreams of owning a home with a pool. But the 34-year-old fifth-grade science teacher knows it’s a pipe dream: She recently had to find a roommate to help with the monthly rent of $1,425 on her three-bedroom house in Houston. Although that’s relatively cheap compared with rents across the country, it’s tough on a teacher’s salary. Saving up for a down payment is out of the question, said Paquette, a single mother.

“It’s not like I went into this job thinking I’d make a bunch of money, but I expected to be able to make ends meet,” Paquette said. Finances have been easier since she left North Carolina for Texas (North Carolina ranks in the lower tenth of states for teacher pay), but Paquette’s struggles aren’t unique.

As housing prices have soared in all the usual major metropolitan areas—as well as in cites like Las Vegas, Sacramento, Atlanta, and Minneapolis—teachers’ wages haven’t kept pace. And with school districts already struggling to recruit and retain educators, this rising gap is just another barrier to keeping teachers in the profession.

Redfin, a real estate brokerage firm, compared listed home prices in more than 30 cities with average teachers’ salaries to gauge what percentage of available homes teachers could afford. (Administrators, principals, and special-education teachers were not included in the data, and New York City was not studied.) The number of homes within reach for a single teacher has declined in some places by more than 25 percent since 2012.

That’s no surprise in San Francisco, where just 14 out of the 2,244 listed houses were within reach on the average teacher salary of $71,000. But the dearth of affordable options has worsened in Las Vegas, Sacramento, Chicago, and Dallas, where in each city less than 25 percent of listed houses are affordable for teachers.

Of course, home ownership—traditionally an economic engine of the middle class—isn’t out of reach for just teachers. High housing prices are pushing middle-class workers out of many cities. Redfin chief economist Nela Richardson said the notion that civil servants live in the communities they serve is becoming a thing of the past: “These are middle-class salaries, but middle-class people can’t afford to buy homes.”

Rental prices mirror the housing market, so teachers who rent are also getting pushed out of the cities in which they teach. Meanwhile, attempts to fix the crisis in Los Angeles have backfired, and other novel solutions—like Sen. Corey Booker’s eight-building Teacher Village in Newark, New Jersey, or plans for teacher-only residential units in the San Francisco Bay Area—either just opened or are still years away. Despite creative housing solutions for our cities’ educators, many critics of these plans argue that the real solution is simply paying teachers higher salaries.

David Fisher, the vice president of the Sacramento City Teachers Association, lived in a studio apartment with his wife and son for 15 years before he could afford a house in Sacramento. “These aren’t McMansions in the suburbs,” Fisher said. “These are modest houses is modest neighborhoods.” Besides, he said, most teachers are concerned with paying off student loan debt before even considering buying a home.

There are a few cities where it’s not so bad. In Philadelphia, where teachers’ salaries saw a 15 percent increase since 2012, more than 35 percent of houses for sale are affordable for teachers. Like most civil servants, teachers have more options anywhere the housing supply is larger.

Paquette, the science teacher, figures that she may be able to buy a house in 10 years—and says she’ll stay in Houston as long as she can afford it. Whether she’ll stay in education is another question. “I get that itch quite often,” she said, “to leave the classroom.”

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Buying a Home Is Nearly Impossible for Teachers in These Cities

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Trump’s First Move as President: Screwing Over Homeowners

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Earlier this month, then-President Barack Obama issued an executive action requiring the Federal Housing Administration to decrease insurance premiums on FHA mortgages, a change that could have potentially saved low-income homeowners as much as $900 per year. In his first administrative order as president, President Donald Trump suspended this Obama order, which was slated to go into effect on January 27. In practice, this means that low-income homeowners will be stuck paying higher insurance premiums on their FHA-insured mortgages.

FHA loans enable homebuyers—often those with lower incomes and who have fewer assets or bad credit—to bypass conventional lenders who would likely deny them loans by taking out a mortgage that’s insured by the federal government. The borrowers have to pay FHA mortgage insurance, to protect the mortgage lender from a loss should the borrower default on their home loan. In his announcement of the change, Obama said the drop in premiums would help stabilize the housing market and spur growth in housing markets still recovering from the financial crisis.

At his confirmation hearing last week, Ben Carson, Trump’s nominee to lead the Department of Housing and Urban Development, which oversees the FHA, said he was concerned about the Obama administration’s last-minute implementation of this insurance premium drop and would reexamine it. “I, too, was surprised to see something of this nature done on the way out the door,” Carson told members of the Senate Banking, Housing, and Urban Affairs committee. “Certainly, if confirmed, I’m going to work with the FHA administrator and other financial experts to really examine that policy.”

Presidential executive orders require no congressional approval to pass or overturn. Trump has vowed to eliminate all of Obama’s executive actions during his first days in office. This may be his first step toward fulfilling that promise.

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Trump’s First Move as President: Screwing Over Homeowners

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What’s the most overlooked but important issue of the year?

The crisis of affordable housing (after climate change, natch).

It’s not for lack of local media coverage. Follow the news from New York City to Seattle, and you can’t avoid stories about skyrocketing home prices and rent along with record rates of homelessness. The bestseller Evicted followed low-income residents in Milwaukee who were tossed out of their homes for missing a rent payment.

Add up each local crisis, city by city, and it’s clear that the country has a national crisis that requires a national response. Yet affordable housing passed without much notice in the 2016 election. Interviewers and debate moderators never asked about housing. Republican presidential candidates, including President-elect Donald Trump, a high-end real estate developer, ignored it altogether.

To be sure, Hillary Clinton and Bernie Sanders issued modest proposals on housing policy. But they gave housing little attention on the campaign trail.

So will 2017 be the year that our political system wakes up to the housing crisis? The signs aren’t promising. Trump and congressional Republicans want to cut housing aid, which has already been squeezed by cuts from the Budget Control Act of 2011.

But maybe it’s the year that progressives in Congress propose a national strategy to provide high-quality, affordable housing to all Americans. It’s a political cause in dire need of a champion.

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What’s the most overlooked but important issue of the year?

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After Ghost Ship Fire, Tupac’s Old Lawyer Is Helping Artists Fight Eviction

Mother Jones

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In the aftermath of the Ghost Ship warehouse fire in Oakland, California, that claimed 36 lives earlier this month, the inhabitants of live-work artist warehouses all over America have been receiving eviction threats and notices. In Oakland and San Francisco, residents of at least five such spaces are now facing eviction. Warehouses in Baltimore and Denver have been shuttered since the fire, and others are facing increased scrutiny in Nashville, Philadelphia, and Dallas, as well as Indianapolis, Indiana, and New Haven, Connecticut. Many worry that this activity is related less to safety concerns than to property owners’ desire to expel low-wage artists in favor of wealthier tenants.

Bay Area artists, at least, have a high-profile defender—the civil rights lawyer John Burris, who has stepped up to act as a liaison between tenants and local government code enforcers. Burris, whose name pops up in many a lawsuit regarding abusive practices by local police, is best known for representing Rodney King, Tupac Shakur, and the family of Oscar Grant—who was killed by a BART police officer, inspiring the movie Fruitvale Station. Standing up for low-rent artists seemed a little off the beaten track for Burris, so I reached out to him and his housing guru, James Cook, to see what was afoot.

Mother Jones: What inspired you to help artists facing eviction after the fire?

John Burris: My daughter lost two friends. I knew she has spent time in the Bay Area’s artist warehouses, so I called her immediately when I heard the news. She had two friends who were missing, later confirmed dead. I feel her pain, but I’m pained just as a community person as well. The loss of 36 lives is just outrageous. So we thought, how can we help?

MJ: How are you helping? Are you filing a lawsuit?

JB: No. It’s not clear that the city can be held liable for the fire. But the eviction issue came up very quickly. We invited people in the affected community to sit around our table and tell us their stories. That’s what we do in civil rights law—we hear stories, and the stories move us to action. We said we don’t think we can do what we would traditionally do, which is file a lawsuit, but maybe there’s something else. Now we’re facilitating communication between the city and the artistic community. Ultimately we’ll have to bring in real estate people as well, because they hold the aces. Our goal is to make sure people know their rights, and make policy adjustments if needed to protect people from eviction.

MJ: Why is it important to you that these artists stay put?

JB: We’re concerned that this may turn into a boondoggle for landowners and real estate interests, who will use this tragedy to evict artists and members of alternative communities—including LGBT people. We fear they will legally be able to put people out by saying they need to get a building up to code for safety reasons, and then turn around and rent it for a lot of money to someone else. This practice is not uncommon. Take African American communities—often developers will come in and renovate a neighborhood, driving up rents, and the city fails to take action on behalf of the community, which eventually has to move out. The African American population is declining in Oakland, as it has already declined in San Francisco. So the question is, will this particular event cause that process to occur with respect to the artistic community, here and elsewhere?

MJ: Doesn’t the city have a responsibility to enforce housing codes?

JB: The city has a responsibility to make sure a living space is not harmful. But that doesn’t mean it has to be up to every code, in which case landlords would have reason to put people out left and right. Basic requirements of safety have to be maintained, but we have to preserve the affordable housing stock, too, and respect people’s right to stay in their homes.

MJ: Why would cities want to stop gentrification?

James Cook: We use the term “legacy community” to talk about a community that’s part of a city’s cultural, historical, and economic fabric. For good reason, we have housing laws in many cities designed to keep legacy communities in place, and to create some sort of economic structure to help those communities survive. If you can maintain legacy communities, the theory is that cities will thrive economically, thrive politically, thrive intellectually, thrive culturally. In the Bay Area, artists and LGBT people are legacy communities that we want to sustain.

MJ: Do you think a city has a special responsibility to its current residents, as opposed to potential future ones?

JB: Yes, a community is defined by those who are already here, not those whom you want to attract.

JC: Housing is the next dimension of civil rights law. There’s actually a constitutional case to be made for this. The Constitution says you have the right to a notice and a hearing before your property can be taken away. Some people may say that if you’re a tenant and you don’t own your house, this shouldn’t necessarily apply to you. But housing rights advocates argue that the law applies because you own a stake in the property as a leaseholder. Across the country, we increasingly have laws that mimic the 14th Amendment for tenants.

MJ: Does protecting these artists have implications for other legacy communities?

JB: Yes. Decreasing one type of diversity usually leads to decreasing other types. So if rents go up because the artistic community is expelled, African Americans will suffer too. Forward-thinking leaders of cities value diversity for many reasons, including economic ones. So if something comes along that threatens that diversity, the city has a responsibility to do what it can to make sure that doesn’t happen.

John Burris, right, stands with Tanti Martinez, whose asthmatic son died while incarcerated in California.

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After Ghost Ship Fire, Tupac’s Old Lawyer Is Helping Artists Fight Eviction

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Why Ben Carson’s HUD Confirmation Hearing Should Probe His Tie to a Felonious Dentist

Mother Jones

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Donald Trump’s selection of Ben Carson as the new secretary of housing and urban development is puzzling. After all, Carson was a world-renowned brain surgeon who has never held a government job before. Recently, a top adviser to Carson noted that the retired doctor was not interested in joining the Trump administration because “he has no government experience, he’s never run a federal agency.” Yet Carson two weeks ago did claim he had sufficient experience for the HUD job, saying, “I know that I grew up in the inner city and have spent a lot of time there, and have dealt with a lot of patients from that area.” But his campaign website’s issues page made no mention of housing policy. And the extent of his public pronouncements on housing seems restricted to an odd statement in which he compared attempts to desegregate public housing to “failed socialist experiments.”

Yet Carson does have experience with real estate and home building, thanks to his association with an investor who once pleaded guilty to committing fraud.

Much of Carson’s personal wealth, estimated to be at least $8 million, is tied up in a handful of real estate deals. These deals were engineered with the assistance of a close friend named Alfonso Costa. Costa was once a successful Pittsburgh dentist, but he went into the real estate game full time after pleading guilty to a conspiracy to commit health insurance fraud. Now Costa runs a successful commercial and high-end luxury real estate empire with properties in Pennsylvania, Florida, New York, Italy, and elsewhere. Costa also heads the Pittsburgh office of Carson’s charity, and he appears to have managed Carson’s real estate investments.

An investigation by Mother Jones last fall showed that Carson’s investments included ownership of a commercial office building in suburban Pittsburgh that netted Carson and his wife between $200,000 and $2 million in 2015. The holding companies used to buy this building were registered at Costa’s home, and Costa managed the buildings on behalf of Carson.

But that’s not Carson’s only apparent involvement with Costa. On his most recent personal financial disclosure forms, Carson listed owning a plot of land in Palm Beach County, Florida, which seems to be a rather grand horse farm:

But according to property records, the estate was actually owned by Costa’s real estate development company. For more than a year, it was listed for sale at $10 million, but records show it has never been sold. Sotheby’s currently lists the farm, which includes a riding ring, 22-stalls, brick floors, tack rooms, and a small apartment for a caretaker, for rent at $330,000 a month. Carson’s campaign refused to confirm his role in the investment.

In response to questions from Mother Jones about Costa, Carson a year ago said:

Al Costa is my best friend. Al Costa is my very best friend. I know his heart. I am proud to call him my friend. I have always and will continue to stand by him. That is what real friends do!

Carson’s relationship with Costa dates back to before Costa’s 2007 arrest and indictment on the health care fraud charge. In a 2013 book, Carson wrote that doctors who commit health care fraud should get “the Saudi Arabian Solution,” although he allowed he “would not advocate chopping off people’s limbs.” But years earlier Carson had appeared in court as a character witness for Costa and had asked the judge to impose a lenient sentence on his friend. At that time, he wrote in a letter to the court, “Next to my wife of 32 years, there is no one on this planet I trust more than Al Costa.”

Carson and Costa have vacationed together, and Carson has spent time at a luxury villa owned by Costa on the Amalfi coast of Italy.

In years past, HUD has been an agency prone to cronyism and corruption. So it might be worthwhile for senators involved in Carson’s confirmation to vet Carson closely and to examine his relationship with a convicted felon.

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Why Ben Carson’s HUD Confirmation Hearing Should Probe His Tie to a Felonious Dentist

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Shonda Rhimes, Norman Lear, and Common Take Aim at Inequality in This New Documentary Series

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In “America Divided,” a new five-part documentary series premiering tonight on Epix, the nation’s growing inequality—in matters economic, racial, and otherwise—takes center stage.

Headed by executive producers Shonda Rhimes, Norman Lear, and Common, the project looks into the ways inequality underlies so many modern crises, profoundly affecting our schools, our housing landscape, and our political discourse. The correspondents are all household names: Actress Rosario Dawson, for instance, takes us to Flint, Michigan, to meet families affected by lead poisoning. Actor Jesse Williams returns to the classroom to understand the school-to-prison pipeline. Comedian Amy Poehler grills well-to-do families about their relationships with struggling domestic workers.

The actors are invested, and in some cases confrontational. And while it’s a little strange to see them so out of context (especially comedians such as Poehler and Zach Galifianakis) there’s something refreshing about their earnestness. Take Dawson, who displays her humanity when she reaches out to hold the hand of a tearful woman who has been describing the toll Flint’s contaminated water has had on her family. The issues the series explores won’t be anything new to Mother Jones readers, but they are as timely as ever. So if A-list celebs and high production quality will convince you to think more about America’s more entrenched problems, and maybe even to step up and do something, then this series is for you.

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Shonda Rhimes, Norman Lear, and Common Take Aim at Inequality in This New Documentary Series

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Trump’s Economic Adviser Said the Economy Was Fine—Right Before It Imploded

Mother Jones

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Following a tumultuous week in which Donald Trump’s poll numbers tanked and reports of staff unrest dogged his campaign, the GOP nominee is trying to change the conversation by focusing on his economic vision. On Friday, ahead of a big economic policy speech Trump is expected to deliver next week, the Trump campaign released a list of his economic advisers. The roster of 13 men—all are men and five are named Steven or Stephen—includes a handful of billionaires and financial moguls, several of them longtime Trump friends. Also on Trump’s economic brain trust is an economist, David Malpass, who downplayed concerns about the economy shortly before his firm collapsed and the economy cratered.

Malpass is a former economic adviser to Ronald Reagan whom the Trump campaign touts as having “extensive private sector experience.” That experience includes serving for 15 years as the chief economist for Bear Stearns—the Wall Street firm that was deeply enmeshed in the subprime mortgage market—in the lead-up to the investment bank’s spectacular March 2008 collapse.

The fall of Bear Sterns lit the fuse on the economic crisis. And perhaps more so than its competitors, the 85-year-old investment bank came to exemplify the excesses and short-sighted economics that led to the financial meltdown. If Trump is counting on Malpass for economic advice, he had better hope it’s an improvement on the wisdom the economist dispensed as the financial system hurtled toward a cliff. Nine months before his company fell apart, Malpass wrote a column for the Wall Street Journal titled “Don’t Panic About Credit Markets.” He derided the “hyperventilation over the coming U.S. economic slowdown” and wrote:

The slowdown talk weighing on equities also reflects the Wall Street view that debt, mortgage and takeover businesses have replaced General Motors as the economy’s bellwether. According to the bears: As goes the credit market, so goes the economy. Fortunately, Main Street is not that fickle. Housing and debt markets are not that big a part of the U.S. economy, or of job creation. It’s more likely the economy is sturdy and will grow solidly in coming months, and perhaps years.

So, that was wrong.

Malpass did fine, though. He currently sits on the board of New Mountain Capital, a multi-billion-dollar private investment firm, and runs his own market research firm.

Malpass is not the only person on Trump’s list of economic advisers who played a controversial role during the economic crisis.

In July 2008, several months after Bear Sterns fell apart, the federal government was forced to take over Indy Mac, which was overwhelmed by the bad mortgages it had issued. The government was eager to get rid of the bank’s assets, and Steve Mnuchin, who serves as the Trump campaign’s finance co-chairman and is a member of his economic team, swooped in. Mnuchin, a former Goldman Sachs banker and hedge funder, made much of his current fortune by organizing a new bank, called OneWest, to buy IndyMac’s portfolio of mortgages. Part of the deal was that the federal government and taxpayers would cover any losses if more mortgages went bad, and OneWest would make the profits on anything that didn’t. Mnuchin’s bank would become infamous for its hardball tactics and willingness to foreclose on struggling homeowners.

Perhaps the biggest name on Trump’s economic team is John Paulson, a hedge fund manager whose firm foresaw the subprime mortgage meltdown and made billions betting against the big banks that were heavily invested in mortgage-backed securities. In 2010, Paulson’s fund made more than $5 billion, setting a record. Previously, Paulson was a major donor and fundraiser for Mitt Romney and the super-PAC backing his 2012 presidential run.

The defining characteristic of Trump’s team of economic advisers seems to be that they are friends of the GOP nominee, financial backers of his campaign, or both. That includes Tom Barrack, who has been friends with Trump for decades, ever since negotiating the sale of the Plaza Hotel in New York City to Trump. Barrack is well known in financial circles for getting involved with unorthodox deals—in one case, he arranged oil sales between Saudi princes and Haitian dictator Baby Doc Duvalier, giving the autocrat his watch to help smooth the deal.

It’s unclear how extensively Trump will be relying on the counsel of his brain trust. Last year, when asked whom he consults with on foreign policy matters, Trump remarked that his top adviser was himself.


Trump’s Economic Adviser Said the Economy Was Fine—Right Before It Imploded

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