Tag Archives: Poor

TN Joins Lawsuit Against Standard and Poor

News release from Attorney General’s office:
Attorney General Bob Cooper today joined the Department of Justice and other state Attorneys General in filing enforcement actions against Standard and Poor’s and its parent company, McGraw-Hill, seeking accountability for alleged misconduct by the credit rating agency. The allegations involved structured finance securities backed by subprime mortgages that were at the heart of the nation’s financial crisis.
The federal and state complaints allege that despite S&P’s repeated statements emphasizing its independence and objectivity, S&P allowed its credit rating analysis to be influenced by its desire to earn lucrative fees from its investment bank clients. Investors and others in the marketplace relied on credit rating agencies like S&P for accurate ratings because the underlying data for these securities was not publicly available.
This alleged misconduct began as early as 2001, became particularly acute between 2004 and 2007, and continued as recently as 2011.
Structured finance securities backed by subprime mortgages were at the center of the financial crisis. These financial products, including residential mortgage-backed securities (RMBS) and collateral debt obligations (CDOs), derive their value from the monthly payments consumers make on their mortgages.
“The complaint filed in state court today alleges that investors as well as others in the market were misled by Standard and Poor’s promises that its analysis was independent and objective. Unfortunately, as the complaint alleges, this was not the case, and ratings of mortgage backed securities and collateral debt obligations were influenced by the desire to continue earning lucrative fees,” Attorney General Cooper said.
Tennessee’s lawsuit seeks relief to stop S&P from making misrepresentations to the public; change the way the company does business; and civil penalties and disgorgement of ill-gotten profits.
The congressionally-appointed bipartisan Financial Crisis Inquiry Commission concluded in its final report that the financial crisis “could not have happened” without ratings agencies such as S&P.
The State’s Complaint may be found on the Attorney General’s website by going to www.tn.gov/attorneygeneral and clicking on “Filings of Interest.”

Bredesen: Higher Taxes Befall ‘Poor Schmucks’ Without Lobbyists

NASHVILLE, Tenn. (AP) — Former Democratic Gov. Phil Bredesen says small businesses suffer an unfairly high tax rate because they don’t have powerful lobbyists to fight for loopholes.
Bredesen said in a panel discussion about federal debt issues Tuesday at Lipscomb University in Nashville that while the United States has the highest corporate tax rates in the word, the country also has some of the lowest collections as a percentage of gross domestic product.
Bredesen said that’s because big corporations are able to influence tax policy in their favor, while small businesses can’t.
In Bredesen’s words: “It’s all the rest of the poor schmucks who don’t employ a lobbyist to get their special deal that are paying these very high marginal rates.”
Bredesen left office in 2011 after two terms as governor.

Columnists Critique Photo ID Laws (one attacks, two ridicule)

A Republican War on the Poor?
From Wendi C. Thomas’ Sunday column:
This isn’t about fraud. What the right wants to prevent is a repeat of 2008, when a record turnout of young people, Latinos and black voters sent the county’s first black president to the White House.
In response, the GOP rammed through voter ID laws and ones to restrict early voting. It’s the party’s pitiful concession that its platform doesn’t attract and often repels black, Latino and young voters.
If you can’t convince ’em, keep ’em away.
Tennessee’s constitution has but four official requirements to vote: You must be 18, a U.S. citizen, a resident of Tennessee and registered in the county where you live.
In the margins, the GOP has added this: The poor need not apply.

For Driving, No Photo Required
Sam Venable’s Sunday column concerns a 70-year-old woman who has lots of photo ID — except on her brand new driver’s license, sent as a replacement for her former license that did have a photo.
Said Stallard: “Imagine my surprise when I received a blank license with the following statement printed on its face — ‘Valid Without Photo.’
Yep, the sovereign state of Tennessee doesn’t mind if Patricia Stallard and others in her age group hit the highways without photographic proof of who they are. But voting, as this demographic group is wont to do, is another matter.

And It Helps Inspire Apathy?
Scott McNutt touches on the topic in the course of a satire assault on voter apathy in Knox County:
Sue Pressed, an 87-year-old retiree from Inskip, credited Republican lawmakers’ voter-ID laws for helping her resist the temptation to vote.
“I haven’t had a photo ID since I retired from driving a bus 20 years ago,” she explained. “As long as I could vote with my voter registration card, I had this irresistible compulsion to go cast a ballot. But now that I have to prove I’m me to exercise my right to suffrage, I’m cured of that urge, and I want to thank Republicans for that.”

Virtual School Collects $5M for ‘Demonstrably Poor’ Performance

Tennessee Education Commissioner Kevin Huffman is calling last year’s student performance at Union County public schools’ new, privately run Tennessee Virtual Academy “unacceptable,” reports Andy Sher.
“Its performance is demonstrably poor,” Huffman said in an interview last week about the online academy, which under a 2011 law passed by the GOP-controlled General Assembly began operations in the 2011-2012 school year, enrolling 1,783 students from across the state.
The school is operated by K12 Inc., the nation’s largest publicly traded online education company, under contract with the tiny Union County Public Schools system. State taxpayers are footing the bill through Tennessee’s Basic Education Program funding formula. This fall’s enrollment is some 3,000 K-8 students.
K12 officials blame last year’s performance on a variety of factors, including students having to adapt to online learning and the fact that more than half the students started the school late.
Still, the academy’s head, Josh Williams, said improvements the school is taking will raise student performance.
“We do have many plans in place that we are doing this year and have shared this [with] the state,” he said in an email.
Students attending the academy sit at home and learn via their computers, which K12 provides free to low-income children. The school has boosted the number of its teachers from 60 to 121 in response to the higher enrollment.
Union County Trustee Gina Buckner said that as of July 1, her office had responded to K12 Inc.’s 2011-2012 invoices and paid the company $5.04 million out of state funds sent to the Union County school system.
“I think there still may be one more payment,” said Buckner, who noted it’s difficult to say how much that would be because the budget submitted to county officials by the Union County Public Schools system didn’t address the issue.
…Under K12’s contract with Union County, the company gets 96 percent of the state portion of the BEP funding. Union County, which has struggled with local funding for years, gets 4 percent as the fiscal agent

Haslam Says Credit Rating Agencies Seemed Postive About TN Presentation

NASHVILLE – Gov. Bill Haslam, Lt. Gov. Ron Ramsey and other state officials have assured New York-based credit agencies that Tennessee is better prepared that most states to deal with federal spending cutbacks and deserves to retain its AAA bond rating.
Representatives of Moody’s, Standard & Poor and Fitch’s credit rating agencies all seemed to have a positive response to the Tennessee pitch, though they their formal response is probably about a month away, Haslam said Wednesday in a telephone news conference.
Finance Commissioner Mark Emkes has all state government departments draft plans last month on how they would deal with up to a 30 percent reduction in federal funds they now receive. That, the state’s long-standing reputation for fiscal prudence and other factors seemed to impress the rating officials, Haslam said.
Moody’s recently put the Tennessee and four other states on a “negative outlook” for possible future downgrade in credit rating, citing what it characterized as a heavy overall dependence on federal spending in the states’ economy.
But Haslam said that, if TVA’s impact is excluded, Tennessee’s economy has about 16 percent of its economic base in federal spending – slightly less than the average of other states. With TVA included, the level rises to about 17 percent, roughly equal to the average, the governor said.
TVA should be excluded, he said, because its budget is not tied to federal spending in Washington and thus not impacted by federal cuts in other areas.
Note: Link to Ramsey’s full statement is HERE.

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